Reply to: Banking success stories; RBS

[Bunk]

Well, the naive answer is yes, £50k paid to all retail customers with RBS accounts probably would be less than £46 billion.

You have to factor in that RBS had £2.4bn of assets and a similar amount of liabilities.

Trillion shirley?

[d000hg]

250 getting chopped tomorrow, agents have been informed to call some tonight to not come back into the office

Keep your phone on tonight

Or leave it off so you can get an extra day's billing.

[SunnyInHades]

Yep and I am thinking of moving away from RBS as well.

Everyone and his wife South of the border with an account managed by RBS (RBS, NatWest, Ulster, Drummonds, Coutts) will probably be doing that if Scottish independence gets the nod.

[AtW]

As usual, headline conceals a completely different picture. Yes, the bank was and is in the brown stuff. Underlying profits are quite healthy at around 2.5bn but right-downs for bad debts + PPI account for the big negative figure.

Yeah, but in 10 years they might have to be declaring massive losses for the "profits" they are making now... that's what happened with PPI, derivatives and other tulip they used to make a quick buck.

[lukemg]

As usual, headline conceals a completely different picture. Yes, the bank was and is in the brown stuff.
Underlying profits are quite healthy at around 2.5bn but right-downs for bad debts + PPI account for the big negative figure.
I am surprised they didn't ringfence the bad stuff to give the good stuff half a chance but they decided not to.
So, how can I make money from this ?
Easy - buy up the direct line shares when they were forced to sell it cheap, 2k profit so far.
Buy RBS ? no, already overweight financials plus think the right time was a while ago.
FWIW I predict the gvmt/us will get all the money back that was invested (although not the opportunity cost if we had put it elsewhere). Its just a matter of when.
GLA

[MyUserName]

250 getting chopped tomorrow, agents have been informed to call some tonight to not come back into the office

Keep your phone on tonight

Did this happen?

[MyUserName]

250 getting chopped tomorrow, agents have been informed to call some tonight to not come back into the office

Keep your phone on tonight

Yes, but who told you?

[doodab]

I always wondered how the Losses to taxpayers reported in the media account for the disposal of most successful businesses once owned by RBS, such as Worldpay and Direct Line.

They needed to sell those to raise money to cover the losses and meet more stringent capital requirements.

[tarbera]

From the top

Where did you hear that from?

250 getting chopped tomorrow, agents have been informed to call some tonight to not come back into the office

Keep your phone on tonight

[mos]

RBS has lost all the £46bn pumped in by the taxpayer - Telegraph

I always wondered how the Losses to taxpayers reported in the media account for the disposal of most successful businesses once owned by RBS, such as Worldpay and Direct Line.

[AtW]

Also Govt got shares for that money, so even if that money is spent Govt got something that might have value, possibly negative if more cash is required ...

[AtW]

RBS has lost all the £46bn pumped in by the taxpayer - Telegraph

In all fairness for those who made those 46 bln RBS is an excellent success story...

[doodab]

The obvious answer is yes - pay £50k to all those who have accounts with them would be cheaper than all these billions.

Well, the naive answer is yes, £50k paid to all retail customers with RBS accounts probably would be less than £46 billion.

You have to factor in that RBS had £2.4bn of assets and a similar amount of liabilities. Savers deposits were a tiny fraction of those liabilities, in total they had something like £600bn of deposits from businesses, governments etc, and the rest was money borrowed from the market. Without the capital injection they would have defaulted on much of that, losses that businesses and other financial institutions would have had to absorb. The knock on effect on businesses would likely have damaged the economy considerably more than £46bn of additional government borrowing has, that's only about 4 months worth of the current deficit.

[doodab]

Probably not, but it might yet be better to wind it down in an orderly fashion if that's possible.

It might be possible, it might even be what they are doing. The bank still needs to be kept running in the mean time, and the losses need to be absorbed, so it's not necessarily going to be cheaper.

[suityou01]

I hate to point out the obvious, but it's because it stood to loose billions on bad loans that no one would lend it money and it needed bailing out.

The only sensible question is whether it would have been better to let it fail catastrophically at the time.