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RBS reports £3.6bn loss

Royal Bank of Scotland has reported a £3.6bn loss for 2009.

The loss is down from £24.3bn in 2008, while many experts had been predicting losses of £5bn for 2009.

Chairman of the bailed-out bank Philip Hampton says the losses were driven by the legacy of actions taken in the past, for which responsibility has been allocated and the relevant people are no longer with the group.

Going forward, group chief executive Stephen Hester says RBS’ progress in 2010 now depends on the pace of economic recovery, prospective regulatory change and the improvement of impairment losses and write-downs.

He adds: “We see the outlook as cautiously encouraging for RBS and the economies we serve, although with clear risks. It looks as if loan impairments may have peaked in 2009 and our net interest margin, despite continued squeeze on liability margins and higher liquidity costs, has now shown two quarters of improvement. Our progress in 2009 gives increased comfort in our ability to execute the restructuring challenges that remain.”

The UK taxpayer owns 84 per cent of RBS after the government bailed out the bank in 2008. Earlier this week, Hester waived his £1.6m bonus.

At 9am the banks’ share price had risen by 4.35 per cent from its opening price to 37.7 pence a share.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. So the group made a loss again but big bonus have been paid out again, wish my business plan worked like that !!!!!

    It is worth noting that if the Bank had not paid the I.5 billion in bonuses the loss would have been reduced to 1.6 billion and next year the Bank maybe back in profit and been able to pay dividends again to shareholders. I for one would vote againest any future bonueses until the Bank makes a profit and brings in a return to shareholders. If the people at the top of RBS do not like that then leave and go and find another job I think in the present climate you may not find that easy.

  2. Peter ~ go and work for the FSA. It makes a loss (by overstepping its budget year after year) and still pays out generous bonuses to all and sundry and all with other people’s money, i.e. yours and mine. It doesn’t even have to account to any shareholders, its senior people routinely ignore the rulebook on expenses, it gives certain sectors a much easier regulatory ride than others, pursues unconstitutional and possibly even illegal regulatory initiatives, publishes any old tosh it fancies on its website. Must be a great place to work. Who’d care about RBS if they worked for the FSA?

  3. Peter, l do not whole heartedly agree with the level of bonus payments but l think we need to recognise that the RBS annual results could have been worse if they weren’t in a position to attract and retain high calibre staff.

    Yes the results would have looked better without the bonus payments but how much worse could the results have been if the staff were unproductive and demotivated? Although, before you say it, l do accept not all of their staff are either productive or motivated!

  4. Peter try this one as an reason for paying bonuses……

    Suppose that every day, ten men go out for beer and the bill for all ten comes to £100.
    If they paid their bill the way we pay our taxes, it would go something like this…
    The first four men (the poorest) would pay nothing.
    The fifth would pay £1.
    The sixth would pay £3.
    The seventh would pay £7.
    The eighth would pay £12.
    The ninth would pay £18.
    The tenth man (the richest) would pay £59.
    So, that’s what they decided to do.

    The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
    “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by £20.” Drinks for the ten now cost just £80.

    The group still wanted to pay their bill the way we pay our taxes.
    So the first four men were unaffected.
    They would still drink for free. But what about the other six men? The paying customers?
    How could they divide the £20 windfall so that everyone would get his fair share?
    They realized that £20 divided by six is £3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

    So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
    And so the fifth man, like the first four, now paid nothing (100% savings)
    The sixth now paid £2 instead of £3 (33% savings).
    The seventh now pay £5 instead of £7 (28% savings).
    The eighth now paid £9 instead of £12 (25% savings).
    The ninth now paid £14 instead of £18 (22% savings).
    The tenth now paid £49 instead of £59 (16% savings).

    Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
    “I only got a pound out of the £20,”declared the sixth man.
    He pointed to the tenth man,” but he got £10!”
    “Yeah, that’s right,” exclaimed the fifth man. “I only saved a pound too. It’s unfair that he got ten times more than I!”
    “That’s true!!” shouted the seventh man. “Why should he get £10 back when I got only two? The wealthy get all the breaks!”
    “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”
    The nine men surrounded the tenth and beat him up.
    The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

    And that, boys and girls, journalists and college professors, is how our tax system works.
    The people who pay the highest taxes get the most benefit from a tax reduction.
    Tax them too much, attack them for being wealthy, and they just may not show up anymore.
    In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

  5. Yes I agree with Peter herd… comment…the trend in our public servants at the top offices on public funded jobs is one of no real accountability or any penality to them…and this state of affairs, suits those at teh top and assures incompetnace at the highest level and misery for the common man BY THE COMMON MAN…our distresseded poor uncared for society.

  6. Bloody duck ponds and moats you shoud hang the lot of them, investment bankers

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