Nils Pratley’s piece at the Guardian on RBS and Lloyds is very good. Two quotes sum up the situation quite well.
First,regarding Lloyds, Pratley says:
Royal Bank of Scotland‘s shares down almost 20% in two days; Lloyds’s shares an oasis of tranquillity. Those market reactions tell the story of the banking bailout part 3, or part 2(b) as the government would probably prefer. Lloyds has performed a great escape, but RBS has been clobbered…
Lloyds is being forced by the European commission to surrender 4.6 percentage points of market share but will retain 25%, probably more than any bank has ever enjoyed in the UK.
This is the statistic to remember when Alistair Darling trumpets the government’s commitment to greater competition. When one institution is so big in retail banking, actions like encouraging Virgin and Tesco to enter don’t amount to much.
In regards to the horrors brought to us by Sir Fred Goodwin at RBS, Pratley has this to say:
About 10 months after Lloyds started saying the worst was over, the claim looks semi-credible. It is relatively easy to see how – in time (a critical phrase) – taxpayers could earn a profit on their Lloyds shares.
The same hope is still alive at RBS but Stephen Hester’s task is far trickier. RBS, said Lord Myners today, was the "worst managed bank this country has ever seen," a claim that is supported by the sheer scale of taxpayer support. The capital ratios have had to be inflated to unheard-of levels to absorb the losses that are expected to arrive when the toxic rubbish from the Goodwin era washes up in the next few years.
The difference between the two banks is striking and goes entirely to management of the two firms.
The full article is linked below.
A tale of two banks at RBS and Lloyds – Nils Pratley, Guardian