RBS Divis

Glen_Clark

gadgetmind wrote: »

Paying dividends will send a powerful message that they are starting to get back to normal (or even better than they were before, Steve Austin style!) and that they are now a business in which people can invest. The value of the shares will be boosted and the taxpayer will have a (reasonably) graceful exit.

I expect the first essential stage of this (resumption of dividends) to occur on prefs in the next few months and ordinaries in the next 12-18 months.

Sounds like wishful thinking.
'Getting back to normal' will be when they have repaid the taxpayer £45 billion, plus interest, and have the financial strength to guarantee their own debts without taxpayer support.

Glen_Clark

atush wrote: »

for them to pay dividend again, you need them to be back in profit. And for the profit to be expected to be stable in future. and for their shareprice to be stable/going up (in case they have borrowings linked to share price etc not topention performance profit again).

None of this will happen if the board allow the decisions of the bank(from firing to hiring to divesting of assets to directors pay etc) to be micromanaged by the Opposition, the press and the public.

This weeks rants (and I totally get the public reaction) have probably set the bank (and profits to be repaid to the taxpayer) back. As the micromanaging and full out public assault on a private individual and his earnings was as far as I can see immoral if not illegal.

For Labour to call a vote on it, when they arranged it was despicable. Are there any lows to which they will not stoop? Quite frankly it beggars belief.

You don't get it do you?
The public are the majority shareholders. If the majority shareholders don't have a say on Hester's bonus who does?
The strength of feeling that has been shown in the last week shows the opposition there will be to paying dividends before the taxpayer is off the hook for the banks debts.

gadgetmind

Glen_Clark wrote: »

You don't get it do you?

I've presented a testable hypothesis; in the next 12-18 months we'll know whether I'm right or wrong.

Would you perhaps fancy doing the same? Make some concrete and objective predictions for RBS and Lloyds coupons and dividends over the next 12-18 months, and we can then all put a ring around a date on our calendars for when to wander back here and check said predictions against reality.

Masomnia

Glen_Clark wrote: »

You don't get it do you?
The public are the majority shareholders. If the majority shareholders don't have a say on Hester's bonus who does?
The strength of feeling that has been shown in the last week shows the opposition there will be to paying dividends before the taxpayer is off the hook for the banks debts.

If the tax payer is the majority shareholder, then the majority of the dividends will go to the tax payer. Why's that a problem?

Glen_Clark

Masomnia wrote: »

If the tax payer is the majority shareholder, then the majority of the dividends will go to the tax payer. Why's that a problem?

Because RBS will probably have to come back to the taxpayer for more money.

Glen_Clark

gadgetmind wrote: »

I've presented a testable hypothesis; in the next 12-18 months we'll know whether I'm right or wrong.

Would you perhaps fancy doing the same? Make some concrete and objective predictions for RBS and Lloyds coupons and dividends over the next 12-18 months, and we can then all put a ring around a date on our calendars for when to wander back here and check said predictions against reality.

Paying dividends would be bad for taxpayers, but good for shareholders. So they have been testing the water by predicting a return to dividends - which has already led to a modest rally in share prices.
Whether they will get away with paying dividends this early remains to be seen. The recent furore over Hesters bonus suggests to me that they won't.

gadgetmind

Glen_Clark wrote: »

Because RBS will probably have to come back to the taxpayer for more money.

Not if they can increase their T1 capital ratio, which won't happen if they can't issue more senior debt and/or tender for existing debt (which will slowly cease to qualify as T1 under B3), neither of which can be done if they don't resume coupons on discretionaries. Once this is done, they will be free to start modest dividends on their ordinaries. As the taxpayer owns a HUGE quantity of these ordinaries (85%?) they will be the main beneficiaries of both the income and the capital appreciation.

atush

Glen_Clark wrote: »

You don't get it do you?
The public are the majority shareholders. If the majority shareholders don't have a say on Hester's bonus who does?
The strength of feeling that has been shown in the last week shows the opposition there will be to paying dividends before the taxpayer is off the hook for the banks debts.

I do get it, because I am a shareholder. Who receives voting papers for AGMs. Something I don't suppose you ever have?

the 'public' don't own the shares, the govt does. And they get the voting papers. And a vote was not taken on this subject directly (although compensation packages are in fact voted on by the board). If the govt current or past did not exercise that vote it isn't my fault.

In this case, Non shareholders (ie the current lab govt and the press) have managed to change the way a private company is run, and it won't be for the good of the shareholders for this to happen.

Glen_Clark

gadgetmind wrote: »

Not if they can increase their T1 capital ratio, which won't happen if they can't issue more senior debt and/or tender for existing debt (which will slowly cease to qualify as T1 under B3), neither of which can be done if they don't resume coupons on discretionaries. Once this is done, they will be free to start modest dividends on their ordinaries. As the taxpayer owns a HUGE quantity of these ordinaries (85%?) they will be the main beneficiaries of both the income and the capital appreciation.

So they need to pay out our money in dividends, so they can borrow more money, to make themselves more financially secure :rotfl:
You're pretty desperate to justify these dividends, aren't you

gadgetmind

Glen_Clark wrote: »

So they need to pay out our money in dividends, so they can borrow more money, to make themselves more financially secure

Yes, that's spot on. I assume you've looked at what qualifies as T1 under B3 and realise why it makes the banks more secure and less likely to need future bailouts?

You're pretty desperate to justify these dividends, aren't you

I don't currently hold any RBS ordinaries, and my Nat West prefs avoided the EU blocker, so it makes little difference me; I'm simply explaining how it works and why dividends are almost certain (0.9?) to resume in the next 18 months.