And it all started at Royal Bank of Scotland. There’s a lesson here for governments.

The 1990s and 2000s were an exciting time for Royal Bank of Scotland (RBS), as the Edinburgh-based institution turned itself into one of the leading players in global markets. As we now know, there was a lot of hubris mixed up in its ambitions, and it ended up massively overextended. When the financial crisis hit in 2008, it was by far the largest casualty, certainly in this country, and arguably one of the biggest in the world.

The bank was forced into a humiliating rescue that saw the government owning almost all its shares. And over the next few years most of its ambitious new ventures were abandoned. There was, however, one unit within RBS, which, although it received very little attention at the time, was to prove spectacularly successful: Worldpay, the tech-based payments business.

The hottest growth area in finance

Worldpay has emerged in the last couple of years as probably the most spectacular British business success of the last decade. On Monday, the company was sold to FIS for $43bn (£32bn). Worldpay sells payment services and software to the rest of the finance industry, as well as retail and leisure chains such as Topshop and Monsoon, who use it to process card payments. Demand for its services has exploded. Payment services have become one of the hottest growth areas in finance, and the combined FIS-Worldpay unit will be one of the heavyweights of the industry.

After RBS was rescued, the EU insisted that the bank sell off Worldpay, along with a number of other units. A pair of private-equity firms teamed up to buy it for slightly more than £2bn. After that it was listed, acquired by Vantiv, and then by FIS. At every stage its value has multiplied. It is now worth 15 times what RBS was forced to sell it for less than a decade ago. Even more extraordinarily, it is now worth the same as RBS itself. The government has done its best to restore the bank to health, and shares have gradually been sold off, but even ten years on from the rescue it is still worth a fraction of what it was once worth.

Of course, it is great to see the company doing so well. Worldpay as part of FIS is likely to remain a largely British company and will create lots of jobs and wealth in this country. But it would surely have been better if RBS had hung on to the company. If we knock out the £2bn received, then if Worldpay were still included, RBS would be worth £62bn, and the government would be a lot closer to earning a respectable return on its bail-out. In fact, if a sale was genuinely necessary, it would have been better for the government to keep Worldpay and sell off RBS for whatever it could get. Either way, the taxpayer would have come out ahead.

Bail out, then stand aside

True, it is easy to make those kind of judgements in hindsight. But it illustrates a larger point. State control often goes wrong, and in ways that few people can easily predict at the time. Sure, the bank was rescued. But then it started to make a series of poor decisions, or had those decisions forced upon it. It is not really clear why the EU felt so strongly that Worldpay had to be sold off as part of the rescue plan. In truth, the regulators probably just felt they needed to tell it to dispose of a few assets. Once a company comes under the government’s control, decisions are guided by what is expedient or politically possible – and not by what makes genuine commercial sense.

We are still learning the lessons of the banking bail-outs of 2008 and 2009. But one of them should surely be that even if a bank does need to be rescued, then the government should keep itself as far removed from day-to-day management as possible. It does not have the expertise, the judgement, or the vision to work out how the business should develop, what assets should be sold, and which units have the ability to grow in the future. And a second lesson should be that a bank such as RBS should be returned to the private sector as quickly as possible and before any more mistakes are made. Heck, at this rate, maybe even Worldpay-FIS could buy it, and probably out of loose change as well.