Thursday, Mar 01, 2007
It's not all bad news out there
Forbes: Royal Bank of Scotland FY profit up 14 pct, hikes dividend
"LONDON (AFX) - Royal Bank of Scotland Group PLC delivered full-year profits ahead of analyst forecasts, and hiked its dividend by a greater than expected 25 pct, prompting a sharp rise in its share price."
On page 19 of the 2006 results posted at http://www.investors.rbs.com/downloads/FYR06.pdf it states that "Impairment losses increased by 15% to £1,343 million," - sounds terrible does't it? That's a mighty shovel load of bad debt. Now here is the real kicker - "Mortgage arrears remain very low – the average loan-to value ratio of Retail’s mortgages was 46% overall and 64% on new mortgages written in 2006." Those are hardly the numbers one would expect from a borrowing populace supposedly MEWed up to the eyeballs.
Posted by monty @ 01:30 PM (148 views) Add Comment
2 Comments
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1. Tick Tock said...
Now here is the real kicker - "Mortgage arrears remain very low
Phew, thanks for that monty. All this time we've been concerned that we are living within the biggest financial bubble in history, but clearly all is well after all. How wrong we all were. We'll all sleep easy from now on!!
Everyone MEW on, we're nowhere near trouble yet.
Monty, go get some more BTL investments quick- you can't go wrong! Prices will go up for ever and ever and ever, honestly!
2. monty said...
> All this time we've been concerned that we are living within the biggest financial bubble in history...
Oh, I couldn't agree more. The planet is awash with cheap money. But when a major player the size of RBS comes out with numbers that contradict the perceived wisdom I'd prefer to try and understand why rather than resort to wilful ignorance. The numbers could be a complete fabrication, of course, but I somehow doubt it given the legal weight of an Annual Report.
> Monty, go get some more BTL investments quick- you can't go wrong! Prices will go up for ever and ever and ever, honestly!
Thanks but I'll hold off on the BTL for now. I'm told there's a crash due.