How’s life at the UKFI? Probably not quite what you expected when you decided to leave the bonus-strewn wreckage of UBS for the quieter life of looking after the British government’s portfolio of dud banks. It’s certainly quiet. We’ve heard nothing for months, perhaps because the charts of the share prices of Lloyds and RBS are enough to render anyone speechless. By now, some had expected the state to be thinking about taking a profit on its vast holdings, but it hasn’t quite worked out that way, has it?

Poor old RBS (83% owned by the UK taxpayer) may be one of the world’s strategically important banks, but it’s going to be a pensioner of the British government for longer than you are likely to serve as chief executive of UKFI. You noted in your last annual statement that “UKFI sees continued reforms to remuneration practices as vital.” Oh dear. Not much progress there, either.

This week it was the turn of Lloyds (41% owned by the UK taxpayer) for the limelight. The Headless Horse is not quite in the knackers’ yard, but it’s hardly ready to race. In July you claimed that “2010 saw progress on returning the bank to consistent profitability and its goal of becoming the UK’s best financial services provider.” Time to look again, I fear. Profitability is anything but consistent, the last chief executive’s forecasts for net margin have turned out to be a cruel joke, and the targets set by his successor in the summer already look unreachable. There is gloom and depression in the other ranks. If you think Lloyds really is the UK’s best financial services provider, I wouldn’t ask the customers if I were you.

At least when it comes to Lloyds there is something useful you can do. The forced sale of 632 branches has effectively stalled, because nobody in their right mind would commit the billions of equity capital needed for a new bank to have any impact. News that Metro Bank has issued just 100 mortgages in 15 months rather makes the point.

It’s time for a more radical solution. Lloyds should split itself, and give the Halifax – still a fine retail brand, despite everything – to the shareholders. No embarrassment about price, the European Commission condition more than met, and the creation of a credible competitor. The (temporary?) departure of Lloyds’ chief executive paves the way for a meaningful review of strategy. What’s not to like?

You could argue that a proper split along these lines, rather than trying to get away with the minimum the commission will accept, is not in the interests of the shareholders. Well, it’s a point of view, but long-term outside shareholders have already lost 90% of their money, and the state’s 63p a share cost price (net of fees) means that there’s no possibility of a sale, and so no point in trying to pretty up the figures. The government can argue that it’s taking a broader view of value creation by increasing competition; after all, few of the gains from the current plan to integrate Lloyds and Halifax will go directly to the poor bloody customers.

Of course, these are “operational” decisions, and you’re not paid your £130k to interfere. But what is the point of the UKFI? In the annual report you say your “performance as an organisation will be judged on the effectiveness of our performance as an active and engaged shareholder”. Not much external sign of that so far, I’d say, either for Lloyds or RBS. You control the votes which could force the UK’s bankers to think about the customers rather than their bonuses. You have the opportunity to press them into doing something socially useful, helping the economy grow rather than helping themselves. Why do I fear you won’t be taking it?