Lloyds are now mostly sold. At a profit. I believe at the current rate the shares will all be gone by February. Assuming they don't sell much over the Summer holidays and Christmas. Quicker if they do.
HBOS are on the way to being sold. RBS, who knows? They've now accepted that they aren't going to stay an investment bank, and are now pruning that bit down drastically - as they just can't fix it. So now reality has set in with the board, it could be time to sell them off quite soon. Although we'll probably make a loss on them. But it still looks like we'll break even or make a profit on all the banks combined. And the Bank of England charged interest on the emergency loans, now all paid back, so that also made money.
And I suspect that QE won't be totally unwound, and that we'll write off at least a few tens of billions of government debt in 5 years time. You can't make a habit of this, or trust breaks down, but as a one off this will have no (or few) downsides.
The banks didn't have turnovers larger than GDP though. It was the size of their loan books that were so huge. And that's been drastically pruned.
The new banking regulation system isn't fully formed yet. Changes may still be made. But what we currently have is an extra tax on profits. This was a change in the last budget, as previously it wa a tax on the size of their assets, but this was felt to penalise Standard Chartered and HSBC - who do most of their retail business abroad. Remember that neither of those two had to be bailed out, and that the UK taxpayer isn't on the hook for their depositors abroad. Though it is a risk if they go pop, as we'd want to bail-out our bits. But Standard Chartered don't have a retail bank here. Anyway, that's sort of their insurance payment, to compensate us for the risk of having to bail them out again in 50-70 years time.
We also have the ring-fence rules. This means that the retail arm of these banks must have separate accounts, and separate assets. So if a bank like RBS needs help again, the government can just let it fall over, but rescue the retail bits like NatWest - and carry on running them as a going concern. This is one reason why RBS are giving up on investment banking. They can no longer use the resources of their retail bank to "invest" with (so called proprietry trading). Thus they have to borrow the money they need for the most profitable trading, rather than use their retail assets - which makes them a good deal less profitable. At this point, it may well not be worth the extra layers of management to try and have joint investment/retail banks anymore, and we may get a natural split, without having to legislate for it.
To be honest, this is still a bit pie-in-the-sky. After the massive shock that Lehman Brothers collapse wrought on the financial system, no one was going to kill a bank as complex as RBS investment arm. The counter-party risk and chaos involved would be too much. But it could be bailed out and wound down under control, with the retail arm easily sliced off and run as a going concern by the government - hopefully with minimal panic and disruption.