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Rbs To Turn A Profit For Uk Taxpayers (Only £57Bn Aps Losses)

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British taxpayers stand to make a £5bn profit from insuring the toxic assets of RBS and Lloyds.

By Harry Wilson

Published: 5:45AM BST 23 Jul 2010 Bailed out banks such as RBS continue to pay large fees to the state for insuring its losses, even though they haven't called on penny from taxpayers. Photo: Getty Images/A In its first annual report published yesterday, the Asset Protection Agency (APA) said it was now confident that it would be profitable for taxpayers who have not yet been called upon to put up a penny.

The accounts also reveal that Royal Bank of Scotland continues to pay large fees to the state for insuring its losses.

Stephan Wilcke, chief executive of the APA, said he was "90pc certain" that the Asset Protection Scheme (APS) he is responsible for would make a profit of at least £5bn, and possibly as much as £6bn. "In the marco economic scheme of things this good news and I have gone from being hopeful to confident that we will make a profit," said Mr Wilcke.

Through the APA, the Government is providing RBS, the only bank to remain within the APS after Lloyds Banking Group bought itself out last year, with insurance on toxic assets worth £231bn as at the end of March.

The APA is now projecting total lifetime losses on the portfolio of £57bn, £3bn below the scheme's excess threshold of £60bn at which point the Government assumes 90pc of the losses.

For the APA to make a loss it estimates RBS's losses on the portfolio would have to hit £75bn, which it assigns a less than 10pc chance of happening.

It is not all good news for RBS, and the APA was highly critical of the bank's internal risk procedures, which more than a year and half after its near collapse are still not up to standard.

In its report, the APA said that it had "expressed concerns over the quality of credit memos and financial analysis" that it had been sent by RBS.

"Some of my guys used to work for JP Morgan and they tell me that if they wrote some of the reports they have received from RBS they would have been fired," said Mr Wilcke.

"The new management know the issues, but it takes time to change the culture of a bank and we are hopeful that things will change," he added.

In a note published yesterday, UBS analysts said the turnaroud at RBS was "less a restructuring, more a rebuild" as they maintained their 'neutral' rating on its shares despite a 53pc increase in their price so far this year.

"We think the market has underestimated the scale of the task being undertaken at RBS and that "rebuilding" may be a better description than "restructuring"," they wrote.

"Years of underinvestment are being addressed and the franchise fundamentally repostioned across all business areas. While it will take time to deliver results, RBS should emerge better positioned with less leverage and more sustainable returns."

Mr Wilcke admitted there was still "significant work to be done at RBS", but said he thought the bank was on the road to recovery.

"It is a multi-year journey with a massive amount of change required in almost all areas: culture, systems, capability and financial to name a few," he said.

He added that he thought RBS was most likely on track to leave the APS in 2012, however he said there were several factors that could hamper the bank's recovery.

One of the main worries for RBS remains the likelihood of a medium-term increase in interest rates, with the APA saying that the currently low interest rates was the main reason the losses on the portfolio had not been higher.

In particular, the worry for RBS is that many of its borrowers that are just about surviving paying low interest rates will default with only a small increase in rates.

There you have it regarding low interest rates. RBS is such a money sucking black hole that all savers have to be robbed to pay for it's crimes.

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"It is a multi-year journey with a massive amount of change required in almost all areas: culture, systems, capability and financial to name a few," he said

Goodwin was good at one thing though - negotiating his £30 grand a month for life pension payoff.

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Goodwin was good at one thing though - negotiating his £30 grand a month for life pension payoff.

...and not growing the size of his bank to the point where it jeopardised the integrity of the currency it was denominated it.

But only just.

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I really wish I hadn't read that. Although we already knew this was the case it's unbelievably frustrating to know. How much longer must the prudent prop up the feckless? Look how much they have taken already.

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There you have it regarding low interest rates. RBS is such a money sucking black hole that all savers have to be robbed to pay for it's crimes.

Yep, don't expect any honest monetry policy from now on in.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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