RBS Divis

IronWolf

Its in the UKs best interest for RBS to start paying out dividends once its balance sheet is strong enough.

Whether politicians will notice that though is another matter, Joe Public doesn't understand dividends and the media will just focus on the share price to say how much we have "gained" or "lost" out of the bailout.

Arguably the government should hang onto these shares long term, but withdraw its guarantee of the debt once safe to do so. They got RBS at a cheap price and it could be a real cash cow in 10 years.

Glen_Clark

gadgetmind wrote: »

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?

Do you think enough people can still taken in by these bankers smoke and mirrors tricks to borrow their way out of debt?
and create illusory profits to pay dividends and bonuses?

gadgetmind

Glen_Clark wrote: »

Do you think enough people can still taken in by these bankers smoke and mirrors tricks to borrow their way out of debt?

I ask again, do you understand what Basel 3 qualifying Tier 1 capital is?

Ark_Welder

http://www.bis.org/publ/bcbs189.pdf

1. Common Equity Tier 1

52. Common Equity Tier 1 capital consists of the sum of the following elements:

• Common shares issued by the bank that meet the criteria for classification as common shares for regulatory purposes (or the equivalent for non-joint stock companies);
• Stock surplus (share premium) resulting from the issue of instruments included Common Equity Tier 1;
• Retained earnings;
• Accumulated other comprehensive income and other disclosed reserves;
• Common shares issued by consolidated subsidiaries of the bank and held by third parties (ie minority interest) that meet the criteria for inclusion in Common Equity Tier 1 capital. See section 4 for the relevant criteria; and
• Regulatory adjustments applied in the calculation of Common Equity Tier 1

Retained earnings and other comprehensive income include interim profit or loss. National authorities may consider appropriate audit, verification or review procedures. Dividends are removed from Common Equity Tier 1 in accordance with applicable accounting standards. The treatment of minority interest and the regulatory adjustments applied in the calculation of Common Equity Tier 1 are addressed in separate sections.

http://www.hm-treasury.gov.uk/d/rbs_aps_apa.pdf

3.9........The Government’s stake now takes the form of ordinary shares and B shares including a new Dividend Access Share that carries a right to a preferential coupon, that is discretionary but must be paid as an ordinary dividend is paid. The combination of the B shares and Dividend Access Share effectively means that if RBS should pay a dividend before its share prices reaches 65p for a set period then the Government will receive a preferential dividend – the greater of 250% of the ordinary dividend and 7% of the technical issue price of the B shares.

Glen_Clark

Do you understand what debt is, and that you can't borrow your way out of it?

I will retire from this thread because it has become obvious there are RBS shareholders with a vested interest in RBS paying dividends, who will say anything to try and justify it.

Being the last to post does not mean you have won the argument.

longleggedhair

atush wrote: »

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.

atush I should not worry too much what Glen says s/he is a bit of a left wing nutter who seems to think the world would be a much better place under the Labour party and Gordon Brown, how can you expect anyone with that attitude to have a reasonable understanding of shareholder democracy and dividend policy....I rest my case!

Glen_Clark

longleggedhair wrote: »

atush I should not worry too much what Glen says s/he is a bit of a left wing nutter who seems to think the world would be a much better place under the Labour part and Gordon Brown, how can you expect anyone with that attitude to have a reasonable understanding of shareholder democracy and dividend policy....I rest my case!

desperate enough to resort to ad hominen. I rest my case

gadgetmind

Glen_Clark wrote: »

Do you understand what debt is, and that you can't borrow your way out of it?

Do you understand that banks (and insurers) need borrowings to operate, and that this borrowing can take many forms? Do you know what recapitalisation is and why it's a good thing?

Being the last to post does not mean you have won the argument.

I care not who "wins the argument" but it does concern me that you'd pile into this issue with strong opinions but little knowledge of the underlying subject matter.

gadgetmind

Ark_Welder wrote: »

meet the criteria for inclusion in Common Equity Tier 1 capital

Those criteria are being tightened and a lot of existing capital will cease to count as T1 during a progressive grandfathering process. If banks are to replace this capital, they will need to tender for it, and the prospectus of most does not allow tenders while dividends aren't being paid.

B3 qualifying T1 will also be loss adsorbing via a coco type mechanism.

longleggedhair

Glen_Clark wrote: »

desperate enough to resort to ad hominen. I rest my case

That was a very short retirement Glen!