If Stephen Hester and Sir Philip Hampton get their way you'll get a chance to buy into the biggest privatisation this country has seen in 2014. But should you get in early? RBS's big two have set that as the target for the bank to be in shape for the first sale of the state's 81 per cent holding. Bosses don't usually set those sort of targets unless they feel they are racing certainties in the event of anything other than a financial earthquake because they can easily become millstones around their necks if things go wrong.
Of course getting RBS in shape for sale is one thing; actually starting the process is quite another. For the taxpayer to break even on the £45bn pumped into RBS the shares will need to break through the 500p barrier. After recent falls they'll need to increase in value by around two-thirds to do that. However confident you are about RBS, it's hard to see it happening over the next year.
RBS might want the Government out of the way – it would help the bank to avoid persistent questions about the morality of a state-owned bank funded by taxpayers of very modest means paying seven-figure bonuses. But it would be politically very difficult.
However, if RBS resembles a normal, healthy financial institution by next year the shares right now would be bargains.
Here's the problem. Investec's Ian Gordon reckons that it might not be until 2017 that RBS produces a return on capital that meets its cost of capital, in other words, that it becomes a sufficiently profitable bank to make an attractive investment proposition.
The UK economy isn't in great shape, and there remain persistent worries that RBS may have to raise fresh capital, although plans to float off part of Citizens, the US arm, should help there.
There may also be further fines to pay over Libor fixing, and we should never forget the potential of a big hit from civil litigation claims somewhere down the line.
RBS shares trade on a shade below 70 per cent of their net asset value, much less than other banks, but the discount is justified.
Mr Gordon is a seller, but to my mind the share price tumble of recent days is starting to make RBS look interesting again, if only for gamblers. Buy, if you're of a mind to speculate.
Lloyds is a different animal. The shares have shown none of the shakiness of RBS. With most of the nasty stuff out of the way, it seems realistic that the Government will start to dispose of its stake in the bank rather sooner, maybe sometime this year, with the figure of 61p being rumoured as the likely trigger point.
I have my doubts. As Mr Gordon points out, 61p is a contrived number. It includes, for example, the £2.5bn the company paid as a fee for the asset protection scheme. Which was an insurance policy Lloyd's would have been able to access should things have got really nasty. It is cynical to include it in the calculation.
The real buy-in price was 73.6p. Such messing around with the numbers to get the "right" figure for a sell-off is one reason why people don't trust politicians. Treasury take note. If you plan to sell a tranche of Lloyds at a loss, be honest about it.
Treasury take note x2. If a big shareholder puts it about that they are willing to sell at 61p, that creates a ceiling for the shares.
In the meantime, Lloyds trades at about book value, in other words, the shares' combined value equals the combined net asset value of the company.
For me, that's high enough. How you view Friday's results depends on how you slice and dice the numbers. Earnings per share, for example, were less than the City had forecast, but on other numbers they were slightly ahead of expectations.
One thing to like about Lloyds is that while there may be a (probably smallish) hit from the Libor fixing scandal later this year, most of the bad stuff should now be on the books thanks to the £1.8bn fourth-quarter top-up to provisioning for mis-selling. Unless the UK economy gets really nasty, it will look something like a normal bank this time next year.
As I've said before, Barclays looks like the best bet among the UK banks at the moment and I would prefer to have my money on the blue eagle rather than the black horse, at least for the time being. Take profit, shift into BarclaysReuse content