RBS reports a record loss of 24 billion pounds
Royal Bank of Scotland just reported a record loss for a Britsh company of £24.1 billion pounds. That’s about £400 for every living soul in the country:
Royal Bank of Scotland (RBS) has announced the largest annual loss in UK corporate history.
RBS, which had to be bailed out by the government last year, said that its 2008 loss totalled £24.1bn (£34.2bn).
It also said it would put £325bn of toxic assets into a scheme that offers insurance for any future losses.The Asset Protection Scheme, backed by taxpayers, aims to strengthen bank balance sheets and encourage banks to lend more to firms and individuals.
Chairman Philip Hampton blamed the massive loss on the “unprecedented turbulence” in financial markets and deteriorating conditions around the world.
“We owe our continued independence to the UK government and taxpayers and are very thankful for their support,” he said.
He warned that 2009 would be another tough year.
The bulk of the losses came as RBS made a £16.2bn write-down on poorly performing assets, mainly resulting from its 2007 takeover of ABN Amro at the height of the boom.
It said underlying losses totalled £7.9bn.
Well, I’m glad we cleared that up — the underlying loss was only £7.9 billion. Meanwhile, Sir Fred Goodwin who shepherded the organization until November has retired at 50 with a pension of £650,000 annually.
Sir Fred Goodwin, the former chief executive of Royal Bank of Scotland who was widely blamed for the bank’s demise, has begun drawing a pension of £650,000 a year, at the age of 50, prompting a Treasury investigation.
The pot from which Sir Fred draws his pension is worth £16 million.
UK Financial Investments (UKFI), the government body created to oversee its stakes in the banks, said it was “vigorously pursuing with the new [RBS] chairman whether there is any scope for clawing back some or all of this pension entitlement, and whether the board took the decision in the full knowledge of the facts.
“This is another example of the culture of rewards for failure that we are determined to sweep away for the future,” UKFI said in a statement.
Corporate trivia: which company previously held the record for the largest corporate loss in British history?
Vodafone: £21.9 billion.
Sources
RBS reports record corporate loss – BBC News
£650,000 pension for former RBS chief Sir Fred Goodwin – Times Online
Vodafone’s £21.9 billion loss overshadows sales – IHT
I have not read the details about RBS’ loss, but I suspect that it is the result of new management and owner (UK taxpayer) making their own assessment of the extent of the rot. If this indeed is the case, it only again proves that the managment of zombie banks has to be ejected as they otherwise will cover their behinds for as long as they can and new people, reporting to the taxpayer, be put in place instead.
Ed, last year I guesstimated losses on UK banks from residential mortgages at about £40 billion.
RBS loss on such loans was £8 billion, Halifax owned up to £6 billion on residential, that’s £14 billion and they are about a third of the market, so maybe there’ll be another six months of this and the worst will be over (plus unknown figure on US RBS rubbish and commercial loans).
RBS £16 billion write off on goodwill is just paper gains evaporating, those losses reflect the (paper) gains that ABN Amro shareholders made on the the take-over. No real money has been lost on this.
Every living sole? Wow, that’s a lot of fish!
@HRSAILOR,
yes, bad typo. Thanks for catching it.