LONDON (Reuters) - The British taxpayer should make a healthy profit from an insurance scheme set up to handle billions of pounds worth of toxic bank assets, the head of the body organising the scheme told Reuters yesterday.

Britain's Asset Protection Agency — which insures some £230 billion ($349 billion) worth of risky assets held by Royal Bank of Scotland — was set up last December under pressure from regulators.

"I've previously said I was hoping the taxpayer would end up with a profit. I'm now saying I'm confident the taxpayer will end up with a profit, with a 90 percent chance of success," Stephan Wilcke, the head of the Asset Protection Agency, said in a telephone interview.

The APA, which runs the insurance set-up, said in its annual report yesterday that the taxpayer should end up with a profit of £5 billion from the scheme.

The British Treasury has already received £2.5 billion for the scheme's management of risky assets held by Lloyds Banking Group, and the APA said the Treasury should get a further £2.5 billion for handling the RBS assets.

As of March 31 this year there were £230.9 billion of risky RBS assets covered by the asset protection scheme.

The cover for those assets operates like a conventional insurance policy. If RBS's assets fall in value the bank will absorb the first £60 billion of losses.

Any further losses will be shared by RBS and the government with RBS taking 10 percent of the loss and the government taking 90 percent. Wilcke was confident that the losses on the RBS portfolio would not exceed the £60 billion mark. The Asset Protection Agency currently estimates a lifetime expected loss of £57 billion on the portfolio.

"The taxpayer collects in the fees and he won't have to pay out on the liabilities," he said.

He added, however, that the current financial market uncertainty was making it difficult to sell parts of that RBS portfolio.

Wilcke took up his job at the Asset Protection Agency last year after joining from credit asset manager Cairn Capital. He was also formerly a partner at private equity firm Apax Partners and financial services consultancy Oliver Wyman.

He was paid a salary of £150,000 pounds for his work at the APA during the course of the last year.