Adam Lovejoy writes: Today we salute the Royal Bank of Scotland that has posted a record loss in British corporate history of £24.1 billion yesterday. As a result the government would have to pump another £13 billion into RBS, on top of the £20 billion that have already been given to the group. As a result the Treasury would from now on control 84 per cent of RBS.
We, at StirringTroubleInternationally, say: well done RBS! We always had faith in you.
In a further dramatic development yesterday Sir Fred Goodwin, the former boss of RBS, who is credited with presiding over record losses, was told by the Treasury that he should forgo his annual pension of £650,000, which he draws already even though he is only 50-years-old. Sir Fred has told the government to go to hell.
Well done, Sir Fred! That’s the spirit. How dare they try to take away what is rightfully yours? It is not everyone who could boast of presiding over such spectacular losses. As we point out in the heading of this article, a record is still a record.
But a feeling of slight sadness and disappointment is still felt throughout the banking community. The thing is that RBS was hoping to lose £28 billion last year and there was even talk about £35 billion vanishing without trace. These would have been outstanding results and it would have been practically impossible for most other British banks to match at any time soon. Losses announced today by the Lloyds Banking Group that has taken over HBOS last month were only £10.8 billion. Not even half of what RBS has announced although, of course, thew Lloyds group might not know the exact amount of the hits is has taken and we will know later of more losses.
Our sources in the City have told us that it took years of hard decisions and tough choices at RSB to achieve the spectacular results that have been announced yesterday. Although Sir Fred has been instrumental in notching up gigantic losses other RSB directors did not stand idly by and did nothing. Oh no, these determined people were working hard, day and night, to see to it that RBS would lose as much money as possible.
According to a leading expert in finance, Professor Rags Simkins, who asked to remain anonymous but we ignored his request, the brilliant stroke of luck came about four years ago when Sir Fred and several other executives at RSB had decided to lend substantial amounts of money to several Russian oligarchs who had no problem in providing proof of their assets. This was a clever decision. Russian oligarchs can accumulate huge amounts of money and, what is even more important, are known for the hospitality and gratitude when conducting deals with foreign financial institutions. These men work hard and play hard and are usually a joy to mix with socially, as the current Business Secretary Peter Mandelson has found out. Judging by the losses the Russian oligarchs have suffered in this financial crisis – the latest figures coming from Moscow point to $170 billion lost by the top ten richest businessmen – it could be safely assumed that this year RBS might announce more losses this year and we, at StirringTroubleInternationally, will probably reflect the feeling of many people in Britain by wishing the group to show a bit of metal and prove that it can become a 100 per cent owned by the Treasury.
Good luck RBS we say. And good luck Sir Fred. You’re still a young man and you can join the Financial Securities Authority, the board of the bank of England or become a highly paid advisor to the government on financial policy. You can also work for some of the Russian oligarchs whose loans from RBS have been written off thus making their life just that little bit more richer.
But what about the future of British banks, you might ask. What happens this year and next? Well, there are many more opportunities to register enormous losses. The Russian economy is close to collapse and that would mean that around $500 billion of losses are on the cards. A large chunk of this money would constitute part of the investments made by British banks. It promises to be an exciting time ahead.
We wish the banks and large investment funds in Britain luck in their efforts to lose more money. Especially as it is now underwritten by the taxpayers and they can technically wrire off as much as they want. So they should be bold and demonstrate persistence and determination.
Don’t let us down Barclays and HSBC! Go for it guys! Whatever happens Britain plc will look after you.