MPs warn Lloyds and RBS bailout billions may not be recovered

MPs in UK have warned that over $66 billion of taxpayers' money invested in RBS and Lloyds TSB may never be recovered.

According to UK's public accounts committee (PAC), lessons be learned from the sale of Northern Rock should be applied to decisions over sale of the banks "with value to the taxpayer taking precedence over speed of exit".

According to MPs monitoring government financial affairs, the Treasury made a series of costly mistakes at the time it was engaged with Northern Rock, which had to be taken into public ownership in 2008.

Only two bidders evinced interest in taking it over, triggering fears that the two remaining state-backed banks, RBS and Lloyds, would not go for a profit.

Auditors had, earlier this year, projected that losses on the rescue of Northern Rock would amount to £2 billion, excluding the loss of about £480 million on the sale of Northern Rock Plc to Virgin Money, owned by Sir Richard Branson, last year.

The National Audit Office (NAO) had in May highlighted the projected losses in a report into the bank's nationalisation in 2009 and its subsequent part sale.