RBS losses: wrote down everything?

I,_Brian

We recently saw media reports that banks may not be writing down all of their CDO exposure, and this was attributed to the 25% fall in Barclays share price last Friday.

Then RBS today announced - well before time - that it expected to write-down a massive £20 billion on top of losses of £8 billion.

This had me wondering whether what RBS is doing now is writing down all exposed assets and that this was a major part of the announcement.

In other words, like pulling off a sticking plaster, RBS decided one big bad announcement would be better than a drip of bad news.

After all, there was no need for RBS to announce losses today - it doesn;t even report its accounts officially until the end of February.

So I wondered whether anyone else here thinks RBS may have reported a worst-case scenario in write-downs? After all, £28 billion is an awful lot to suddenly write down in a single quarter.

Thoughts?

sabretoothtigger

That was my impression but a worst case scenario could be more still

Masomnia

I think that's likely yeah. I also think it was a condition of the most recent bail-out, that they disclose everything in return for help. Very positive move in my view.

Did they really have to write-down ABN Amro? If not it certainly seems a 'prudent' thing to do, especially given that it makes their report the biggest loss in UK financial history. £8bn is a much more palatable loss.

mrposhman

I would expect some of the writedowns to also include provisions against the case on bank charges. if it goes well for them, it increases available profit to either buy back shares or increase next years profits, if it goes against them, it has a 0 effect on profit in 2009.

I'd be surprised if they hadn't included this as its a win-win situation.

sabretoothtigger

Surfer wrote: »

Great Maker ! :mad: Why the **** should we bail them out???


remember this?? :rolleyes:

2003 http://news.bbc.co.uk/1/hi/business/3502091.stm

2004 http://news.bbc.co.uk/1/hi/business/4293167.stm

2005 http://www.thisismoney.co.uk/news/article.html?in_article_id=407291&in_page_id=2

2006 http://www.independent.co.uk/news/business/news/rbs-marks-16392bn-profit-with-bumper-payout-for-investors-438531.html

2007 http://news.bbc.co.uk/1/hi/business/7268276.stm


http://www.telegraph.co.uk/finance/2805052/RBS-raises-payout-after-profit-growth.html


RECORD profits every damn year.... we should not be bailing them out .....

SICK SICK SICK :mad:

http://news.bbc.co.uk/1/hi/business/4742846.stm

:money::money:

Masomnia

I know! Creating thousands of jobs, paying millions in tax, bringing in foreign investment, paying large dividends to pension funds... terrible.

The banks were greedy and made mistakes, but they provide essential services. A modern economy just wouldn't work without them, we can't afford to not bail them out.

withnell

Masomnia wrote: »

Did they really have to write-down ABN Amro?

Considering quite how much they paid for it, and the general value of banks these days, then yes!

sabretoothtigger

Barclays was originally due to take over amro but was outbid, does that mean they have 20bn spare now that would have been lost

thor

Masomnia wrote: »

I know! Creating thousands of jobs, paying millions in tax, bringing in foreign investment, paying large dividends to pension funds... terrible.

The banks were greedy and made mistakes, but they provide essential services. A modern economy just wouldn't work without them, we can't afford to not bail them out.

We should replace those at the top with people not trying to constantly make
a quick buck. This is why we the economy is in trouble. Bankers are not very good when it comes to money it seems but I suppose it does not matter as they know govrnments have to bail them out. It is blackmail.

Masomnia

thor wrote: »

We should replace those at the top with people not trying to constantly make
a quick buck. This is why we the economy is in trouble. Bankers are not very good when it comes to money it seems but I suppose it does not matter as they know govrnments have to bail them out. It is blackmail.

I agree we should definitely boot them out, and the government should use its influence through its ownership to do it. Its a scray thought that maybe there's no one better!

Personally I think bailing out the bankers and bailing out the banks isn't the same thing.

Degenerate

Behind the scenes the government has been twisting their arms to do just this. Write everything down with the pessimism of a Robert Peston blog, purge the system of any doubt. Then they can get things moving again with a clean start, and the only way is up. Expect to see similar from all the other banks. British banking is being rebooted.

When the dust settles after the coming weeks, I will be going heavily into bank shares.