´óÏó´«Ã½

So in summary, RBS has made a dog's breakfast of the last year or so's business, but its underlying business is going well.

In a way, that's actually somewhat comforting for the long term.

My wife works for RBS and at the moment they are driving forward regarding Mortgages, Loans, Insurance. The credit crunch may be biting but RBS is definatly attracting more customers and still lending very respectively.

This is just a blip and the fundermentals are still very very sound

So despite monumental incompetence the culprits are still in position! What does it take for the "establishment" to realise it is populated by mediocrities who make money when times are good, even I can do that, yet repeatedly fail in difficult times. That is bad management and would not be tolerated at a junior level in "none establishment" roles. The fact that the RBS management did not even know the history, where Lloyds made similar errors less than twenty years ago, prove that it is not about business acumen but who you know or what school you went to. No doubt this wiill all happen again within another twenty years as the same mediocrities or their heirs will be of the same quality. No wonder British banking once the world leader is now becoming a minor player and the City is increasingly foreign controlled.

As far as I am concerned, the sooner the likes of Tesco get into banking and drive the old established firms out of business the better.

Currently the major banks are just run by chinless wonders who know little about banking but are well connected.

The executives have shown themsleves to be completely incompetetent but are still making huge salaries and bonuses courtesy of the pension funds (ie you and me).

There are so many aspects to the financial industry and government that stink to high heaven. Time for a big clear out.

After years of taking credit for snatching NatWest from under the sleeping noses of Bank of Scotland and the English banks for a song old Big Head Fred had to go one deal too far. He believed his own hype.

A bargain like NatWest comes along once in a career - all the hard work was done before he bought it. A bit like the British economy when Gordon Brown took over.

Fred's mistake was to think that he could do a NatWest with every thing he touched. Hence all this buying of little American banks.

Why do people persist in buying anything American or investing in America? The last person to escape the US with any cash was Andrew Carnegie 100 years ago. I don't think the yanks have forgiven us since.

As for Fred's discomfit - you'd want to have a heart of stone not to laugh.

Would there also happen to be any internal fraud/losses their not telling us about? We'll wait and see.

These results demonstrate clearly how divorced RBS is from the rest of UK industry and the UK economy.

Now it has decided it will operate primarily in its own interests it is of little benefit to the rest of us.

Scotland in particular needs a new bank.

Having had the misfortune to work for RBS I'd just like to say...


Aaaaaa ha ha ha ha ha haa. Ha ha ha ha ha ha ha ha ha ha ha!



Ha ha haa!

Scotland in particular needs a new bank.

Another couple of years and you'll have one. The ECB.

#9...

Very droll but on the other hand let me remind you that Europe has Siemens, Volksvagen, Porsche, Alcatel and a whole range of other powerful industrial players and isn't reliant almost entirely on smart alec financial services companies.

If the ECB helped that happen then as the saying goes - bring it on...!

Someone's loss is someone else's gain so they say.

So who are the people who have made tons of money at the banks expense

It certainly hasn't disappeared into thin air.

Or perhaps it's just been spent on lots and lots of stuff made in Asia.

Happy days!

Currently the major banks are just run by chinless wonders who know little about banking but are well connected.

I think you'll find Sir Fred is an ex-grammar school boy made good from Glasgow. Hardly your archetypal chinless wonder.

The one thing that is so sad with all these banks is not the make-up or provenance of their boards but the fact that not one of them had the courage to stand up and say 'Enough of this self-cert mortgage lunacy' until it was waaaay too late.

There were expose programs on TV years ago showing the abuse that was taking place. HBOS's Birmingham and Midshires being particularly exposed. This was at least two years before the so-called credit crunch. That was the time when the damage could have been avoided. Prior to that Boards and CEO's could claim they had no idea about the day-to-day intricacies of this division or that division.

Shareholders and pension funds are equally culpable. The boards should have been set straight years ago that they should not be lending money to anybody prepared to photoshop a P60 and using middle-men cut-out 'IFA's' wasn't going to help. The bank would still lose the money even if they weren't culpable of poor advice.

This is a collective failure by the government, the banks, their shareholders and pension funds to nip in the bud the obvious abuse that was highlighted in plenty of time.

They have collectively failed and it is right that they should collectively suffer.

If the ECB helped that happen then as the saying goes - bring it on...!

You're kidding right? The ECB helped bring on Porsche, Volkswagen, Siemens and Alcatel?

In the same sense that the ECB helped 'bring on' the Weimar Republic.

What the ECB certainly did bring on through ultra-low interest rates is a property bust of spectacular proportions in Spain and Ireland. And the same mentality that led to such busts in Ireland and Spain would have led to a bust in the UK too. But we had our very own 'independent' BoE to engineer that for us anyway.

But best of luck with the ECB. I'm sure that Scotland will be right up their list of priorities when they come to setting their rates. Right up there with Estonia. And Ireland.

I think that the last few days prove that a bank can survive the credit crunch and still make a profit so long as it does not also possess vaulting ambition.

Banking should be, and is becoming once again, very boring.

Banking has no space for vaulting ambition, risk-taking and big bonuses for doing half a job.

One day we might eventually see the return of the professional banker.

Commenters keep blaming UK banks for something they haven't done...
The "subprime crisis" was almost entirely a US phenomenon, but had the terrible side-effect of drying up cash on the global markets almost overnight once the bubble burst. So UK and European banks are effectively paying for sins they didn't commit.
"Lending money to anybody prepared to photoshop a P60" has absolutely nothing to do with it, because repossessions didn't start here, they started in Ohio. US citizens are much more subject to economic changes and downturns because of their weak welfare, so products coming form the US were weak, but unfortunately they gave a bad name to an entire category of financial products...

So RBS won't be Bradford and Bingleys white knight then?

Who will buy B and B?

"Like most banks, Royal Bank is deleveraging, or lending less than it was, in the spirit of these more risk-averse times. That's what its shareholders would want, though there's a serious price for most of us in the form of slower economic growth."

There are some of us who argue that the only economic growth we should be pursuing is that which is neutral with the future; real improvement in our productivity, in the way we do things, in the quality of what we produce. And that economic growth generated by stealing from the future is something that should be recognised as being the underhand trick that it is, should not result in credit going to its perpetrators, and should if possible be established in the general mood as a socially unacceptable thing to do.

Bearing this in mind, perhaps we would do well to assess how much of our current hardships and suffering are the direct result of the deliberate underestimation of the future costs of actions taken to boost the economic growth of the past.

Speaking generally, if you read what the journalist, economists and experts have to say, it is quite possible the shysters in business are going to get away with it this time. Regulators will find a way to reflate, they will con the consumer sufficiently to believe that speculating is investment, the multiplier will start to gain traction, and one or more of the rollercoasters will begin to trundle along once again.

However, if you look at the data, it is a different story. In general, the valuation of assets in bank balance sheets is a convenient fiction. The reason has not changed: bad loans, exacerbated by excessive gearing, which will unwind until at least 2010. The causes have not changed: incompetent regulators. The excuses have not changed: deny everything, admit nothing, and make counter-accusations.

It seems that, until we have a hard landing, as in 1929, the talking heads are going to stay in denial. Will it be this time that the invisible hand works its ruthless magic? The data seem to say, yes. Until it does, the social destruction wrought by the regulators, in allowing the shysters to hold sway, will continue.

Fortunately, thanks to the internet this time, the truth is still out there. For example, Roubini and nakedcapitalism, and, especially their blogrolls, give very good pointers to real, raw and live data. We who are not economists have the advantage that we can freely read these sites, without being ostracised by our peers for fraternising with bears, heaven forfend. I know it is difficult to believe, but some respected local economists read Roubini for the first time this year! For day-to-day information, there is this site, ftalphaville and wsj marketbeat.

USA data is good, and we are several months behind. The difference is that they have a fundamentally strong economy. Take away our banking and financial utilities and pumped up property sector, and what have we?

Fortunately, also, there is a canary to tell us when the hegemony of the shysters has stopped: hedge funds. These are opaque financial entities left to do what they like by regulators. They reflect the degree of gullibility in the system. As long as there is a single hedge fund standing, we can be sure there is a bubble lurking, somewhere. Hopefully, they will not be regulated against, because then we will no longer have a canary.

In the meantime, we continue to grope our way towards understanding what free markets really mean, and how to prevent obstacles to their proper functioning.

Sitting at home last year with half an ear on the news I could tell the A B N takeover was a step too far. That was before I knew it was riddled with subprime exposure, which has added greatly to R B S losses. If I had walked in on the board meeting and said don't do it I would have been laughed at, because obviously I know nothing about complicated financial instruments. Simple business common sense appears to have been thrown out of the window along with the banks assets with the people who made those decisions shouldering no responsibility. Immediate resignation by anyone supporting that takeover would be a step, because they should have been able to foresee the downside of the credit cycle and the poisoned sub prime units. Or shall we just forget about it as usual. Exactly wnhat does it take to bring a bank down, these days? This makes Nick Leeson look like an amateur.

This comment was removed because the moderators found it broke the house rules. Explain.

"Someone's loss is someone else's gain so they say.

So who are the people who have made tons of money at the banks expense

It certainly hasn't disappeared into thin air."


Oh, but it has. The bank magicked it out of thin air in the first place (inflation of the money supply), and the bank magics it back to thin air again when the loan is defaulted (deflation of the money supply).

#4 Tesco are already in banking (about 3 years) butin conjunction with RBS! Sainsbury's the same with HBOS.

What is really scary is that the UK sub-prime crisis is yet to hit. in the 90's quite a few mortgages were sold at 7xs and a very few at 20xs gross salary. And from some very large respectable FTSE 100 firms.

"Its so-called credit market write-downs were a staggering £5.1bn - an almost incomprehensibly big figure."

Er? Was the £5bn profit from this time last year equally baffling for Robert? Or could this be another great example of the current ´óÏó´«Ã½ doomglooming culture?

Well investors on the Stock market today see value in UK Bank Shares.

Perhaps they see through all the doommongering to the possibility of buying pounds for pennies !

The Shortsellers have probably oversold the market by quite a bit.

But that is what happens when a Herd panics and stampedes.

It would be nice to think that Investors were better than Herd animals, but thats life.

Of course the real losers are UK pensioners, whose Pension Funds are invested in wildly gyrating shares !

Of course some of those Shares will recover, but some may be bought out cheap, like Alliance and Leicester and Paragon.

Oh dear, thats a free market for you !

Freemarkets all round and devil take the hindmost!

It is worth noting that the British Housing market is very different from America's.

It is also worth noting that Inheritance plays more of a part in rising House prices in Britain than in America.

Generally speaking, people in Britain are more likely to spend all or part of any inheritance on property and upgrading their Home.

Americans tend to inherit either very large sums, or not very much at all.

Britain tends to have more small inheritors.

These inheritances distort the housing market upwards, at least in the fashionable areas.

So higher interest rates might affect some, but very many more will not be affected at all.

Also second home owners distort the housing market, it remains to be seen how many of them will bother selling their holiday homes because of a credit crunch.

I suspect not many!

Commenters keep blaming UK banks for something they haven't done...
The "subprime crisis" was almost entirely a US phenomenon, but had the terrible side-effect of drying up cash on the global markets almost overnight once the bubble burst.....
"Lending money to anybody prepared to photoshop a P60" has absolutely nothing to do with it, because repossessions didn't start here, they started in Ohio. ....

I'm going to take issue with this. I can see why it's in the UK banks and UK governments interests to try and place the blame for the UK's sub-prime crash elsewhere but it simply doesn't wash.

In the last 8 or 9 years this government has borrowed and squandered like there was no tomorrow. The government's borrowed money has washed through the system stimulating 'growth' ie yet more borrowing as those not employed by the state have to mortgage up to match the newly minted borrowing capacity of one million newly minted government 'jobs'.

The result was that house prices boomed and the great British public forgot all about the 1980's housing crash. Because Gordon had told them this time it was different. No more boom and bust.

The banks were too frightened their shareholders would punish them if they didn't compete in this orgy of lending and so lent money to anybody who could be bothered to Photoshop a P60 and a wage slip. Ability to pay went out the window. Sensible multiples of earnings went out the window. House prices rocketed. We all felt richer so we all borrowed more. Gordon was happy - the illusion of prosperity allowed him to brag about what a great chancellor he was.

But it was all borrowed money. Government borrowing, personal borrowing, bank borrowing. We hadn't got richer - we'd just borrowed from our future for a new car, a foreign holiday and one million additional government drones to get under our feet. Some miracle. Some economy.

Just because the bust started in the US doesn't mean our bust wasn't already lined up. It was. Ten years of borrowing and squandering and selling houses and financial products to each other masquerading as a healthy economy? It had to end.

Ireland's property bust predates the US. It was just a question of who would fall first.

Maybe the yanks could blame the Irish.

What's even more amazing though is that some folk think that the problem is that we now can't borrow any more money. If only we could 'free up' the credit market and borrow more then every thing would be alright. It's borrowing that got us into this mess. Borrowing more ain't going to get us out. It's payback time.

The comparison with Lloyds is pretty misleading.

a. £715M in 1989 £1.4bn today if inflated by the RPI (which is incidentally up 38% since Labour came in).

b. Lloyds in 1989 had a much smaller balance sheet and equity base.

one loss in 40 years in what are exceptional and, outside of Goldman Sachs, unpredicted circumstances is a fair performance in my book.

As far as all the stuff about the economy being built on borrowed money we seem to be fogetting that every £ borrowed was spent on something, creating wealth, employment, social stability - the alternatives of a reduced economy - unemployment, social strife etc... we tried and did not like too much, as far as I can recall.

Should Sir Fred and the others take some kind of "hit" for their performance - of course and I think if we look at their various Share schemes we will find plenty of evidence of that already happening.

RBS should seriously consider selling ABN Amro

Robert:

Looks like Freddie'll be scanning the situations vacant pretty soon. Love to see him flipping burgers somewhere.

As far as all the stuff about the economy being built on borrowed money we seem to be fogetting that every ? borrowed was spent on something, creating wealth, employment, social stability - the alternatives of a reduced economy - unemployment, social strife etc... we tried and did not like too much, as far as I can recall.

Every pound borrowed was spent on something? It's becoming painfully evident that about 10p in the pound was spent on 'something' and the other 90p was squandered like a drunken sailor on the government equivalent of booze and lap-dancers. Ie massively over-priced shiny new computer systems and one million extra dead-weight government employees. Even the governments own riggers of statistics show that all this extra 'investment' has actually resulted in a decrease in productivity in the NHS.

'Creating wealth?' Great. Every year Gordon would go on about how the economy 'grew' 2.5% and how clever he was. It does rather up the odds of the economy growing 2.5% if you borrow 3% of GDP though doesn't it? Wonder what percentage of GDP he'll have to borrow this year to rig the growth figures. 5%? 6%? 7%. Creating wealth. Look at me. I've borrowed a million quid. I'm a millionaire. I'm 'wealthy'.

'social stability'. The lowest rates of social mobility since the second world war. Increasing child poverty. The UK turned into an internal gulag with ID cards proposed for everybody because this government's policies have failed to integrate a sizeable percentage of immigrants. And this 'social stability'. How is that measured? Can I buy some at Tescos? Is it a freely convertible currency this 'social stability'. Or is it more Labour party hot air as an attempt to justify what happened to 350bn quid that was squandered.


And now that we could really use some money. A bit of pump-priming as we stand on the edge of a precipice of debt we find it's already been squandered. On 'wealth creation'. And 'social stability'.

Good. With all this 'wealth' and 'social stability' gambolling about the land we should be well placed for the coming recession. Indeed with that much 'wealth' and 'social stability' it's difficult to see a recession at all.

So the government debt this year won't be of the order of 70bn then. What with all that 'wealth'.

Will try and avoid getting into the political issues in this post (#32) - they may well be valid however all I am saying is that, unless the cash was physically destroyed (burned ?) then someone else benefitted from having sold something to the person who borrowed the cash.

Collectively then the economy expanded, goods were produced or imported, people employed, earned income, paid taxes and spent money creating a virtuous or vicious circle, depending on your take on this.

It is simple economics and the real choice in this country is- have a constrained economy, high unemployment, social unrest, them and us society with high taxes to fund a ballooning benefits system or a version of what we have seen for last 6-7 years where benefits system spending has been diverted into creating what may well be noddy jobs, economy boosted on supply of cheap money and inflated asset values leading to a place where you no longer worry about your car radio being nicked or your TV being stolen.

Ultimately it is all a zero sum game where, unless we fancy a dose of communism, human nature will always drive us into what GB failed to eradicate - periods of boom and periods of less boom.

Comments 27 and 32 : U9461192

Yes, I agree with what you're saying here.

I think the rampart behind which the status quo defenders are able to shield is the taking for granted that economic growth and prosperity are two ways of describing the same thing. So that it is not possible to imagine greater prosperity without economic growth, and, conversely, it's not possible to imagine economic growth without the achievement of greater prosperity. And, being inextricably linked, that the more economic growth you have, the more prosperous you become.

I wonder if there's anyone confident enough to explain why it is that the units that are used to quantify reported economic growth are exactly interchangeable with those used to measure prosperity. On any definition of prosperity that doesn't tie back to reported GDP, that is. Otherwise it's just circular, which takes us no further forward.

33 - think of this magic money as IOUs that people have been swapping for goods and services instead of real money.

Each IOU has interest owing on it. Now crafty bleeders behind the scenes have been buying up the IOUs , working out how much they are potentially worth with all the interest, and selling them on at a discounted rate.

But being crafty bleeders, they have used the funds generated from this selling on to bankroll more loans to create more IOUs.

But wait !!! There are even craftier crafty bleeders lurking in the background. And they have been paying for the IOUs with more IOUs - in fact 'Super IOUs'.

These 'Super IOUs' are watertight !! TO remove all risk, they get 10 IOUs, split them into tenths, then re-package them so that there are now 10 'Super IOUs', each one consisting of a tenth of each of the original ten IOUs. And so what if one fails? what with the projected interest returns and the fact it's been watered down in a 'super IOU with nine other tenths from different IOUs, it will still make a profit.

Brilliant !! Tell you what, we'll use these 'super IOUs' as collateral to make more loans for more IOUs !!! In no time we'll be loaded !!

But one in ten didn't turn bad, 2 in ten did. And the houses that a lot of them were used to buy have started to fall in value as well.

Oh dear.

And as you can see 33, the money hasn't 'gone somewhere', it was never there to start with, jyust an IOU secured against a house that can't cover it.

Goodwin?No. Badloser?Yes.

A gentleman would have had the grace to leave by the back door, ruefully reflecting upon the detestable characters portrayed in Anthony Trollope's,"The Way We Live Now".

or a version of what we have seen for last 6-7 years where benefits system spending has been diverted into creating what may well be noddy jobs, economy boosted on supply of cheap money and inflated asset values leading to a place where you no longer worry about your car radio being nicked or your TV being stolen.

I'll go along with this benign version of the economic miracle although personally I feel it a cynical and dangerous way to engineer a boom. Back to RBS and their role in the boom and nascent bust the point is that continually borrowing money year on year for over a decade (planned spending for 2008/9 and 2009/10 included) is no way to run an economy. Eventually the bills mount up, the interest mounts up and finally you can't even borrow enough to pay the interest.

Which is where increasing numbers of individual borrowers now find themselves hence rising home repossessions. This is a recession entirely of the UK governments making. The alternative is to believe that everything would continue to be fine indefinitely if only the government increased national debt by 3% every year and we all individually borrowed an additional 5% every year for good measure. It was utterly unsustainable. The US sub-prime 'trigger' was just that. A trigger. But the point of no return on national and personal borrowing to maintain the illusion of 'wealth' was passed in about 2002.

There is nothing new in money being created out of thin air.

Everytime you buy on HP or with your creditcard in effect money is created.

Each time you buy a Gift token money is created.

In the case of borrowing, so long as you pay back the loan, there is no problem.

Living Standards for everyone can be raised by a 'boom', this is not a bad thing, as long as the 'boom'isn't overcooked.

However, this 'slump' is looking more engineered everyday.

The Powers that Be have decided labour should throw the next Election and so their policies take a suicidal turn.

And a crash in the Markets is engineered to lose them the support of the mild tory Middleclasses.

And the destruction of a Northern Bank to lose them the support of the Working Classes (such as they are).

Now I am not a conspiracy theorist but this whole situation looks less and less accidental.

Now I am not a conspiracy theorist but this whole situation looks less and less accidental.

It's certainly not accidental. It's entirely predictable. It was predictable as far back as 2001/2002 when the UK government set about borrowing 30bn a year on average, flooding the economy with borrowed cash and created a million extra non-jobs to rig the employment statistics.

From then on the denouement was entirely predictable. Borrowing will have to be maintained to pay this million non-jobs. A million extra over-paid government drones will increase demand all round thus creating a boom. The privately employed people will have to up their mortgage borrowing to compete with the newly flush million non-jobs created from fresh air. House prices will go up. People will suffer from the 'wealth illusion' and borrow even more. We'll have a boom just like in the late 1980's. Gordon Brown will tell us all how clever he is.

Millions will go into unmanageable levels of debt but sooner or later the party will have to stop. The banks will finally sober up and stop lending so readily. You cannot just increase your borrowing indefinitely. It was only ever a matter of time.

Here's another prediction for you. Alistair Darling reckoned borrowing this year would be 43bn. I reckon it'll be closer to double that.

Alistair Darling reckoned UK 'growth' this year would be between 1.75% and 2.25% (and he was planning to borrow 2.9% of GDP to engineer this). I reckon we'll be in technical recession before the year is out.

Unemployment will soar. The banks have got their rights issues away. Watch for 10,000's of job losses in branches. Watch the trickle down effect as all that unborrowed money doesn't get spent in our shops.

It's no accident. It was inevitable once we got borrowing and squandering on such an industrial scale.

What we need is a nice Liberal government rather than a Conservative or Pseudo Conservative government.

Lets all vote Liberal !

It must be their turn now to play Government in the Grand old Play of politics.

They must be tired of playing Crowd roles.

RBS deserve criticism but we should take care not to aftertime.

I cant remember the screaming headlines about overpaying for ABN Amro at the time.

Some did say it and fair play to them but only a fraction of those who are saying it now.

The US sub-prime exposure is a different manner.

RBS racked up these assets away from the eyes of shareholders and the press.

And it is astonishing that they could buy assets that could go so bad so fast.

Still, theres only so much exposure to this left that hasnt been written off.

So take away Fred's halo definitely, criticise him definitely....
....but I suspect in years to come we will look back at the share price in 2008 calculating how much we made or could have made.

The beauty of being an aftertimer though is that you just change what it is that you said all along! :)

#8 Play nicely, now ;)

I wonder what the implications are for RBS employees' "profit sharing" scheme this year as it is the only way the majority of employees recieve any sort of annual bonus?

Pardon my semantic pedantry Robert, but I would describe the ABN deal as the RIGHT deal at the WRONG time.

There is a great strategic fit with RBS's global ambitions, they just bought (their bits of it) right at the top of the market and have seen value evaporate before their eyes.

Shareholders should keep the faith; the RBS share price is grossly undervalued. In 3 years time I dare say things will look very different with ABN fully integrated and a shiny new CEO. My personal tip to succeed Sir Fred is Mark Fisher, the head of the ABN managing/acquisition board.

(BTW I don't work for RBS)

"RBS should seriously consider selling ABN Amro"?? I beg to differ. Today's announcement shows that already RBS is saving nearly a million pounds a day on synergies found between the banks - and these were just the 'quick wins' - the serious savings are still to be made. Don't forget that for every 100 units ABN AMRO made in income 86 of those were spent. RBS were only close to breaking into the 30s here - and ABN AMRO were still seen as successful! A reduction to just 60 would see massive savings and subsequent increases in profit. I think it can be taken down further. If there is one thing RBS is good at, it is saving money (we won't talk too much about losing it!!) - although a good deal of the pain RBS is suffering at the moment came with AAB (ABN AMRO Bank).

Totally agree with #42, but I for one am not unduly worried about the employee "profit share". It is calculated on the full years profits and even the most pessimistic doomsayers admit the bank will still make 4 - 5 billion in 2008.

It amazes me that our UK banks,once known for their prudence and risk adversiveness jumped so enthusiastically into the muddy waters of American finance.

Try to borrow money in the UK to expand your business? Not without collateral. Try to borrow money to buy an expensive car? Lets have a look at your earnings... But 'Could you invest in a wizzo US scheme that allows poor people to buy houses by not checking them properly and insuring them against default' Sure! Everyone else is doing it,we want our slice of that cake! They must have taken leave of their senses!

There came a point where this was no longer sensible banking and more like risky speculation...greed overcame prudence and this is the result. I sincerely hope that all the decision makers involved in this in UK banking are not still in their posts,including the senior board members of the banks who presumably agreed to it.

I sincerely hope thay have learnt their lesson. Bank account holders money should be treated with more respect in future. if this goes on people simply will not trust banks,period.

Well RBSs losses sure aren't down to me. My mortgage is with one of their subsiduaries.

Not only did they not pass on the last reduction in base rates they have since had the cheek to RAISE my rate.

So they screw up their business and make their good borrowers (never missed a repayment) pay for it.

The galling thing is that with the state of the market I can't get out at a reasonable cost but as soon as I can I'll be off and I'll be moving my banking as well.

Comment 44 : frglee

" 'Could you invest in a wizzo US scheme that allows poor people to buy houses by not checking them properly and insuring them against default' Sure! Everyone else is doing it,we want our slice of that cake!"

This is, no doubt, the mainstream perception of what's been happening, and the focus of remedial action designed to prevent reoccurrence is on the individuals in the financial system who have allowed their personal greed to overcome their duty to the community. A duty to refrain from following unsustainable, destructive concepts known to be built on foundations of clay.

Fine. If this synopsis is true, then maybe, just maybe, there's the will and the opportunity to put in place something that will make people think twice before succumbing to the temptation of creating a fortune for themselves.

But what if the synopsis isn't true? What if it's not "Everyone else is doing it,we want our slice of that cake" but "Everyone else is doing it; this, currently, is where the returns are; if I want to keep my job I'm going to have to get involved too"

How effective would be a policy designed to blunt the excesses of personal greed, at discouraging decisions taken out of fear? Not very, I'd suggest.

It's a commentary on the failure of nineties/noughties Britain that we consider flailing about at the bad flavours of the month to be superior policy to dealing with precisely identified faults in a calculated way that actually considers the totality of the outcomes.

A useful article apart from one particular. Evidently RBS is suffering to a far greater extent that LTSB in terms of having to write off worthless asset backed securities, whilst experiencing worse performance of its key UK businesses. The result - it posts the second worst hit ever in contrast to LTSB's continued albeit reduced profitability.

And the spin...RBS doing alright, ooh, not so sure about LTSB. Bias, anyone?

As an RBS shareholder I just want to throw in a question re the interim dividend. This is to be received in shares rather than cash, 1 new share for every 40 existing held. Sir Fred stated in his review yesterday that this compared pretty well with last years interim dividend, circa 10p pe share. However the small print states that the existing shares will drop in value to allow for the new shares, i.e. the overall value of shares held remains unchanged, like a bonus issue. Surely this is therefore effectively as if no divdend is payable? So why not save the administrative burden and just say this? Or was it hoped that noone would notice by doing it this way? Or I may be missing something.

Comment 48 : ambitioussamantha

All leading UK banks are denying that the major write-downs of recent months are a correction to the vast profits declared in recent years.

They are unanimous in their portrayals that the period of large and growing profits was, and is, "business as normal"; the write-downs are to do with something unconnected with their normal activities; their ability to make mega-profits is little damaged; and as soon as this hiccup is over, profits will very quickly return to pre-slump levels.

A key validation of the explanation is that there is no need to reduce dividend levels, or to upset projections of future dividend flows, because, after all, this is but a temporary phase, the responsibility for which lies elsewhere. OK, its causing a wee problem with our cash flows just at present, so we'll have to pay the 2008 interim by means of a scrip issue, but there's no reason to think that the flow of future dividends will be impaired in any way.

I enjoyed that interview with Hector Sants of the FSA. I take it we all need to fasten our seat-belts.

And to think they print money. It truly takes my breath away. So much for.... Scottish prudence...

#30 - "RBS should consider selling ABN"

Aside from the significant transaction costs, that shows complete ignorance of the financial payback involved.

Read the statements and the profit ABN made this year alone means that the deal - actually only £10bn of RBS money (nothing like the €70bn was actually shelled out by RBS) - will be paid off in 5 years.

5 year payback with a deal that will generate theoretically perpetual integration benefits of £1.6bn annually.

No matter what Preston thinks, it was clearly the right deal. The timing was fixed - Barclays had already bid - so there could be no wrong time. It was then or never.