How safe is RBS?

fazersix

mrposhman wrote: »

The worst thing people could do is remove their cash and cause a run on the bank. Thats a sure fire way of seeing RBS in total government ownership.

My worry is would nationalisation void rbs stocks and shares value ?

agsnu

fazersix wrote: »

My worry is would nationalisation void rbs stocks and shares value ?

Probably, yes. Why did you dig up a 10 month old thread to ask that?

ERICS_MUM

Before the RBS take-over, Nat West ran an extensive, relatively prudent, well-managed and successful treasury division (money market, foreign exchange and derivatives) which generated excellent income thus profits and dividends.

Its fundamental role was to manage customer assets and liabilities (current & deposit balances, loans, overdrafts, credit lines etc). Like any efficient treasury it analysed / predicted cash flows in order to strike a balance between the need for liquidity and the need to invest.

RBS "took" that division away from Nat West and integrated it with the former RBS equivalent which was subsequently allowed to become more speculative and derivative-led (its down fall). Nat West only exists as a branch network and does not make its own, independent treasury decisions.

If (when) RBS is split up and the branch network is "set free" from the toxic part of the bank, I hope that the Nat West branch/treasury business model is reinstated, upgraded to reflect current market practices and regulatory requirements.

Sorry, having read this back it sounds like a question in the Institute of Bankers examinations, but it might be of interest to someone.

Linda

sabretoothtigger

RBS shares are very unsafe but the bank itself wont close imo

Divestment could be a positive in the long run, it depends how well its done. The theory previously through economies of size, lower and lower overheads but that presumes good central management.
Santander on the other hand I think lets each bank operate its own core capital in order to be dynamic and reduce risk

fazersix wrote: »

My worry is would nationalisation void rbs stocks and shares value ?

That already happened, they arent likely to void all shares and take full ownership because it'd make government debt look extremely bad. At the moment they can pretend like its not their problem

vaporate

Blah99 wrote: »

Safe as houses. I have the bulk of my cash in Natwest, along with my current accounts etc. There is absolutely no way RBS (or HBOS, or any of the big banks) will close its doors, you have nothing to worry about no matter how bad things get. If it even remotely looked like a possibility the Government would step in instantly.

There will be no run on the big banks either. The absolute worst thing that could happen is that a run begins on a bank and everyone is immediately prevented from withdrawing more than a percentage of their total cash on deposit as cash. That would allow everyone to still pay their bills, still take £250 out of a cash machine to buy whatever, still use switch to buy stuff in shops, but would prevent the wholesale withdrawal of deposits.

Look at it this way, if one of the big banks failed and stopped allowing deposits/withdrawals the entire country would grind to a halt near enough instantly. If people did start a run on one of the banks, where exactly would they decide was a good place for their cash? Mind you people are sheep, so it's quite possible.

lol true true

fazersix

Geoff_W wrote: »

Yes, the E-Saver was opened with a 2.1% bonus attached.

I know Natwest pay a derisory 0.1% on their current account and we have looked into changing. All spare cash is transferred to higher paying accounts asap. We do have a Nationwide account, but they've recently reduced the rate on their Flex account to 0% unless I pay in more than £1,500 per month, which is not possible at present. Other providers such as A&L or Abbey I wouldn't touch with a bargepole.

Besides, on our income, we calculated that we would gain about £5 a year in extra interest - it just wasn't worth the hassle.

Geoff

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bjorn_again

I find these "is xxxxxxx safe"? a bit of a bore. If xxxxx is'nt safe, it's highly unliklely that the members of this forum are going to be privvy to some inside information that the wider world is not.
Last week it was "is ING safe"? That died after a dozen mixed replies. Let's face it, if the giants of the banking world fail, we should forget about our money being "safe" in the likes of the Barnsley BS etc etc. The financial world as we know it will collapse.