RBS (The Royal Bank of Scotland) Posts Record $34 billion Loss

[Shaun.P]

Royal Bank of Scotland (RBS) has just announced the largest annual loss in UK history - £24.1bn / $34.2bn.

BBC News Link

CNN Link

I just don't see how it is possible to lose this much money .

 

[mcnicks]

I just don't see how it is possible to lose this much money .

Its easy: just spend money you do not have buying assets that do not exist.

 

[garybUK]

I was listening to BBC Radio 5 Live this morning about this, ouch!!! and the old chief exec walked away with a £650k p/a pension!!! And could lead to job losses of 20,000.

Not good at all.

Have you noticed though, in the UK, it seems to be the scottish banks (apart from Northern Rock) but you don't see Barclays posting monumental losses.

 

[edesignuk]

Barclay's would be just/almost as deeply in the ******* had they won the race to buy the pending disaster that is/was ABN Amro.

From my little understanding RBS were already exposed in their own right, but buying ABN for the insane amount hat they did, only then to also take on the masses of bad debt that ABN turned out to have only put the nail further in the coffin.

 

[gnasher729]

Barclay's would be just/almost as deeply in the ******* had they won the race to buy the pending disaster that is/was ABN Amro.

I could imagine that someone at Barclay's said "wouldn't it be funny if RBS bought ABN? With their boss concentrating in being the biggest boss around instead of running a proper business, if we spread some rumor that we want to by ABN Amro for lots of money, then he won't be able to resist and spend an _insane_ amount on it".

 

[arkitect]

I could imagine that someone at Barclay's said "wouldn't it be funny if RBS bought ABN? With their boss concentrating in being the biggest boss around instead of running a proper business, if we spread some rumor that we want to by ABN Amro for lots of money, then he won't be able to resist and spend an _insane_ amount on it".

You are probably not very far off the truth with that…

 

[oscillatewildly]

ABN - The RBS Shareholders voted for it, couldn't get enough of conquering the World.

UK Taxpayer screwed again re risk and reward.

 

[arkitect]

BBC: Darling faces RBS pension anger

The government could have stopped ex-RBS bank chief Sir Fred Goodwin getting his £650,000-a-year pension, Chancellor Alistair Darling has admitted.

Mr Darling has made a personal plea to Sir Fred to give up his pension - but also admitted that it was now clear ministers could have blocked it.

Shadow chancellor George Osborne called Mr Darling's position "pathetic".

Link…
£650,000 a year… after saddling the UK tax payer with £325bn of "toxic" assets.

 

[bartelby]

It could get a lot worse for the banks soon. Their Bank Charges case appeal got thrown out.
They've gone to the House Of Lords. If that fails they have to pay hundreds of millions back to customers.

 

[barkmonster]

I hope they go the way of Enron and balls to the staff there too.

I'm out over £1,000 in extortionate bank charges and flawed payment protection down to RBS/Natwest!

In 2006, I used my overdraft for the first time ever from summer onwards having moved out at very short notice earlier in the year and exhausted my savings on deposits, furniture etc... then in January 2007, my employer screwed up the payroll run and I only cleared about £700 for a 5 week month!

Natwest chose that exact time, literally on payday to demand the overdraft back in full, suggesting I take a loan with a 19% interest rate to cover it because the overdraft was 29.6% apr. I felt I had no choice or they'd swipe all my wages and leave no money for rent or anything that month so I agreed to it.

Things went wrong at work in late August 2008, costing me a small fortune in bank charges + interest because of the notice period needed to cancel direct debits.

Their call centre drones wouldn't even let me change my rent standing order to weekly over the phone or inform me I had the option of out right cancelling them over the phone instead, causing more charges after I'd got a weekly paid agency job within a fortnight.

The agency job ended in late November and at that point I put in a claim for payment protection because I hadn't being unemployed for long enough to be covered in summer.

It was at this point that Natwest/RBS refused to cover the loan payments after I'd shelling out almost £500 in insurance payments by then and all they agreed to do was knock it off future loan payments after cancelling the payment protection. It's only going to save me £10pm on future payments because I'm tied to a 5 year insurance contract that was linked to the original loan.

I can fully understand why farmer, David Cannon sprayed his local branch with manure.

I'd prefer napalm myself or flood them with gallons of Marmite so they have to eat their way out

 

[Shaun.P]

Have you noticed though, in the UK, it seems to be the scottish banks (apart from Northern Rock) but you don't see Barclays posting monumental losses.

Not quite. If you click the link below (and look at my attachment [from the BBC]) You can see that Lloyds TSB, Northern Rock and Bradford & Bingley collectively owe more than the Scottish banks. However, this illustration has not been updated for todays new bail out for RBS.

I agree - you don't see Barclays posting huge losses, but their recent profits of roughly £6bn were due to acquisitions from the takeover of Lehman Brothers in the US. It does look like Barclays would have posted profits anyway, but they would not have been as high if they did not acquire Lehman Brothers.

BBC Link to this image and explanation.

 

[oblomow]

Barclay's would be just/almost as deeply in the ******* had they won the race to buy the pending disaster that is/was ABN Amro.

From my little understanding RBS were already exposed in their own right, but buying ABN for the insane amount hat they did, only then to also take on the masses of bad debt that ABN turned out to have only put the nail further in the coffin.

True on both sides of the North Sea. ABN/AMRO was a profitable bank in its own right, but management/shareholders wanted to cash in and fell for the offer of Fortis, RBS and Santander. Result: RBS in big debt, Fortis had to be saved by the Belgian and Dutch governments. And Santander is also not doing fine. This happens when greed and big ego's take over common sense.

 

[oscillatewildly]

It could get a lot worse for the banks soon. Their Bank Charges case appeal got thrown out.
They've gone to the House Of Lords. If that fails they have to pay hundreds of millions back to customers.

Goodbye to 'Free' banking.

 

[arkitect]

Goodbye to 'Free' banking.

What is this "Free Banking" whereof you speak?
Never been "free" for me. Monthly fees, outrageous costs on international banking…


*********

Stand-off over Sir Fred's pension
Link…

So should he give up his honeypot of solid gold? Voluntarily or forcibly?

Ex-banker Sir Fred Goodwin's refusal to hand back his £16m pension has been condemned by the Treasury as "unfortunate and unacceptable".

Sir Fred says ministers knew about the £693,000 a year deal for months and that it was approved by Lord Myners.

Lord Myners denies this and has said such a "huge reward" cannot be justified given the bank's losses.

RBS announced a record corporate loss of £24.1bn on Thursday and received a second taxpayer bail-out of £13bn.

Sir Fred's pension pot doubled to £16m last October when the 50-year-old agreed to take early retirement.

The Treasury, which pumped £20bn into the crippled bank, was anxious to get new management in place.

 

[edesignuk]

So should he give up his honeypot of solid gold? Voluntarily or forcibly?

I'd consider his testicles in part payment for him keeping some of his pension.

Beyond that I don't think anyone is feeling very generous.

 

[Wiska]

I just don't see how it is possible to lose this much money .

http://crisisofcredit.com/

 

[arkitect]

I'd consider his testicles in part payment…

Wonder what the price of brass is these days?

'Cause he's certainly got a pair made of that if he manages to brazen this out.


This is just mind blowing:

Sir Fred's pension pot doubled to £16m last October when the 50-year-old agreed to take early retirement.

So he gets kicked out early but as a sweetener his pension gets increased by around £8m…

 

[xUKHCx]

From Sir Fred's position if he can keep on the low for a month or so then this will all blow over in terms of the media hype and he will be able to keep all that money to himself.

I think when the tresaury deem this incident as "unfortunate and unacceptable" they mean the fact that these details have been made public. I am sure they knew about it and perhaps even had a part in it. I expect they were hoping to sweep this under the carpet. I am sure Sir Fred is not the only one walking away with pots of money that the treasury knows about.

 

[Shaun.P]

http://crisisofcredit.com/

What a fantastic video!

 

[Shaun.P]

Lloyds sees HBOS loss of £10.8bn.

A big loss for Halifax Bank of Scotland (HBOS). And a small profit for Lloyds (£807m).

Why did Lloyds buy HBOS? Was it to try and fortify the banking system as a whole, or was it because HBOS was very cheap at the time and they wanted to buy over one of their competitors?

Something that confuses me is that HBOS, for example, has made billions of profits in the last few years (I think yearly profits of roughly £6bn). Do banks not have cash reserves? Why is a loss of £10.8bn so bad if they've been making profits of over £6bn for so long? Why is it these banks have to borrow from the government? Are the profits they do make just reinvested?

 

[gnasher729]

Something that confuses me is that HBOS, for example, has made billions of profits in the last few years (I think yearly profits of roughly £6bn). Do banks not have cash reserves? Why is a loss of £10.8bn so bad if they've been making profits of over £6bn for so long? Why is it these banks have to borrow from the government? Are the profits they do make just reinvested?

Most of the profits came from investments where the risks where calculated wrongly. Let's say you go to a game casino. They have a new game: You bet on a number. If the number doesn't come up, the casino gives _you_ £1000. If the number does come up (chances 1 in 36) you pay the casino £100,000.

And you tell all your friends that every time you go to the casino, they give you £1000. So all your friends go as well. And one day, your number is up. And your friends can't help you, because they all picked the same number. That is roughly what the banks have been doing: Investments that were highly likely to give a small profit, and much less likely to cost you everything. Somehow they calculated that the risk was zero, when it wasn't.

 

[oscillatewildly]

arkitect,

Fred's Pension - He should keep it. Would you give it up? He was allowed to play the system, the issue is redesigning the system.

 

[oscillatewildly]

What is this "Free Banking" whereof you speak?
Never been "free" for me. Monthly fees, outrageous costs on international banking

Yeah, I know. It's more everyone/every account will get charged a fee.

 

[BoyBach]

I think when the tresaury deem this incident as "unfortunate and unacceptable" they mean the fact that these details have been made public.

I would say that the Treasury and The Great Leader™ are very happy that Goodwin's pension details are public knowledge. It means that he continues being a lightening rod for public anger, and the day's press / news cycles barely mentioned the extra £325 billion that was added to our debt yesterday.

It's not such good news for Lord Myners, though!

Why did Lloyds buy HBOS?

HBOS was days away from collapse and the government panicked, waived the Competition Laws and effectively told Lloyds TSB they had to merge with HBOS.

 

[arkitect]

I would say that the Treasury and The Great Leader™ are very happy that Goodwin's pension details are public knowledge. It means that he continues being a lightening rod for public anger, and the day's press / news cycles barely mentioned the extra £325 billion that was added to our debt yesterday.

It's not such good news for Lord Myners, though!

You're spot on!
A few months ago the Labour govt was bending over backwards to banks and city — now they can't throw them to the wolves fast enough to keep their re-election prospects alive…