CNBC must be preparing an updated "that's the final loss, now's the time to buy!" story, again. In the case of RBS it just happens to be yet another overgrown bank who smashed competitors and grew too large. Naturally they were chopping staff along the way and paying tens of millions to investment bankers for organizing deals. Now, like at Citi and Bank of America, it's the taxpayers who are stuck with the ugly bill, but none of the juicy payouts that were previously passed around like candy. Great work, when you can get it.
Royal Bank of Scotland was today on course for the biggest loss in UK corporate history after revealing it expected to write down as much as £20 billion on the falling value of its assets.
RBS said a review of past acquisitions, most notably its share of Dutch bank ABN Amro, would result in a hit of between £15 billion and £20 billion.
In addition, the bank said credit and market conditions in the fourth quarter of the year meant it achieved full-year losses of between £7 billion and £8 billion. The final haul will easily exceed the deficit of £15 billion reported by mobile phone group Vodafone in 2006.
Royal Bank of Scotland also said it had reached agreement with the Treasury to replace £5 billion of preference shares with new ordinary shares, effectively increasing the Government's stake in the bank.
