Politicians are good at deflection – when they want us to get mad, they tell us its our money – as in immigrants are claiming your money – and when they want us not to take notice they say the government's money – as in the 'government' owned bank RBS – Royal Bank of Scotland. Working as a civil servant many years ago in Zimbabwe, one lesson I learnt was that the government does not have any money, we, the people or specifically the tax payers, trust the government to spend our money.
Now I try my best not to be a conspiracy theorist at most times but I smell a rat. Our bank, as in UK tax payer's bank, RBS has been in the news lately reporting on the £6b losses sustained again last financial year in the midst of the happy news from other banks reporting the same week. {https://www.ft.com/content/d1286f4c-f99f-11e6-9516-2d969e0d3b65|Barclays pre-tax profits almost tripled to £3.2bn} and Lloyds Bank despite separating out the TSB in the last few years, {https://www.ft.com/content/c3386d46-f8ce-11e6-bd4e-68d53499ed71|unveiled a special dividend after highest profit since financial crisis}
RBS' losses accumulated over the last 9 years amount to over £50b. The bank that was once the largest in the world by assets, has been selling swathes of these assets (and how many of these were on the cheap?) , cutting costs (read jobs) and increasing capital. The share price – of which we own the majority – have lost a third of its value since the current chief Ross McEwan took over just over 3 years ago. Mr McEwan is expecting to return to profit in 2018 and the following 2 years.
So here we have it. Toxic and loss making assets closed or sold, expected return to profit but holding some £50bn of losses and a reduced share price. It will take some years of profit to clear those losses but will someone come along – convince the government to 'cut their losses' and buy a bank on the cheap? Shhhh, you didn't hear from me.
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