John Ward – Those RBS Results: Fraud On An Industrial Scale, Toxic Mortgages, Jiggery-Pokery In Ulster…And Bonusses All Round – 31 January 2014


‘The government’s strategy remains to return RBS to the private sector when it is value for the taxpayer to do so. Today’s exit from the asset protection scheme is a step in that direction.’ George Osborne, 2012

Well, once more you read it here first. After all the guff about RBS being on the road to recovery and not needing insurance any more, up pops the toxic loan book I’ve been banging on about for three years to rain on the Treasury’s parade.

There was the usual bunny about ‘setting aside’ £3bn for defrauding SMEs. Think about that for a minute: that is £3,000,000,000, so if they defrauded at a rate on average per business customer of half a million, they stitched up six thousand customers…..but current CEO Ross ‘Magoo’ McEwan said last month he couldn’t find any evidence to support it. Should’ve gone to Specsavers.

However, shuffled quietly into the RBS results (very quietly) are other issues that have been causing some, ahem, glitches over the last eighteen months. There’s a good piece at Reggie Middleton about the nature of awfulness at RBS-owned Ulster Bank, where glitches are a way of life. He rightly points out:

‘RBS is materially understating its liabilities AND even went so far as to include links to the SEC and the UK banking regulator so that US/UK taxpayers and investors can notify our erstwhile regulator(s) to the potential of financial shenanigans. The root of the problem is that RBS has materially under-reported its liabilities (in my oh so humble opinion.) Those that stress tested RBS (the same erstwhile professionals that allowed the Irish banks to pass their stress tests 3 months before they started collapsing) apparently overlooked humongous swaths of liabilities.’

In the 2012 Slogpost I linked to above, I wrote, ‘Equally, yet again there were Treasury noises off yesterday about a ‘taxpayer profit’ following RBS’s APS exit, but this is complete twaddle. In the first place, we won’t see any of it given a national debt over £2.3 trillion; and in the second, the RBS share price closed at 280p yesterday…which still leaves all of us 220p per share in the red….Loans backed by UK property should be written down by as much as 30%. The description in the accounts of RBS’s property value is complete tosh…’

Anyway, I can now come off the fence and observe that yes, the loan book has come back to bite Stephen Hester, but a large hook took him offstage some time ago, so it’s no longer his problem. £5bn of the loss is on loans, and much of that on mortgages. How much was Hester’s Golden Hello again?

“Fronting up to our past mistakes is very expensive, but RBS is a much stronger bank that can deal with these costs on its own while running a good capital position,” McEwan said, “Dealing with these litigation and conduct issues is essential if we are to move the bank forward.” Ah, right…so you found them then? But you’re still not going to tell us about the £5bn of loan toxicity, and the naughty bad-debt hidden bits over at Ulster?

We can’t get rid of this millstone, we can’t float it, it’s years away from paying the citizens who own it back – and six years on we still own 80% of it. As predicted, every bit of naked spin that has poured forth from Westminster via Darling, Balls, the Treasury, Cable and Osborne has proved to be nothing but a load of old scrotum. On this lot’s watch, a bank owned by the People defrauded 6,000 of the very businesses striving to lay the foundations of Britain’s future.

In October 2013, Osborne told us that a decision on breaking up RBS was “imminent”. He said it would involve “splitting off” billions in risky loans. Er….what happened, George?

Nobody went to jail, but a great deal of our money has been set aside. Meanwhile, there’s going to be a big fat bonus pool at RBS estimated at an average of doubling the salaries of the bigger swinging genitals. David Cameron ducked the issue yesterday, and later Osborne said the bonuses were “necessary”. What, otherwise they’ll all go and work somewhere else you mean? I wish them luck.

Rule of Law, where are yooooo… / link to original article

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