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Rbs,8Th Annual Loss On The Trot But £4.2Bn For Pension Black Hole.

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Telegraph 27/1/16

'Royal Bank of Scotland has set aside an extra £2.5bn to cover legal bills, compensation payouts and reduced income due to low interest rates, just weeks before it announces its financial results for 2015.

Bosses confirmed the extra costs mean the bank will make a loss for 2015, its eighth consecutive year in the red.

Combined with extra pension fund payments, the costs will knock £3.6bn from RBS' capital buffers.

Lawyers for the bank are in talks with the US authorities to settle accusations that RBS sold toxic mortgage-backed bonds in the years before the financial crisis.

RBS has set aside an extra £1.5bn to cover the civil litigation bill, taking the total provisions ahead of the settlement to £3.8bn. It has yet to set aside any money to cover claims from the Department of Justice and a series of states' attorneys general.

It has also put aside another £500m to cover payment protection insurance (PPI) mis-selling claims, taking the total amount paid and provided for to £4.3bn.

Banks are bracing themselves for a spike in PPI costs before a deadline on claims comes into force in 2018. Regulators are planning a bank-funded advertising campaign to encourage any last claimants to come forward.

"At this stage we think it is hopefully the end, and it has been a long, torturous saga for many banks," said chief executive Ross McEwan. "It is a good lesson for the industry on dealing with customers fairly."

RBS has also taken a £498m goodwill writedown in its private bank, in part because of higher corporate taxes and lower revenues thanks to the unexpectedly long period of low interest rates.

The troubled bank is also making a one-off, lump-sum payment of £4.2bn into its pension scheme as part of a plan to meet new accounting guidelines and to plug a deficit in its defined benefit schemes. This payout will add an extra £1.6bn in costs to its 2015 accounts.'

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Fattening the pig up for market.

Plus, got to keep Mr goodwin in the lifestyle to which he has become accustomed as a pensioner (£350,000 per year)

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£15k worth of Lloyds shares at 80p a pop

£15k worth of RBS shares at £3.10 a pop

To be fair I bought them to hold for the very long term but Buffet I'm not!

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£15k worth of Lloyds shares at 80p a pop

£15k worth of RBS shares at £3.10 a pop

To be fair I bought them to hold for the very long term but Buffet I'm not!

RBS are now about 24p

Only twice their value at very depths of almost shutting the doors in 2008.

That's not too encouraging.

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Fattening the pig up for market.

Plus, got to keep Mr goodwin in the lifestyle to which he has become accustomed as a pensioner (£350,000 per year)

Quite.

Shaun Richards covers this today.

https://notayesmanseconomics.wordpress.com/2016/01/27/how-many-more-promises-about-royal-bank-of-scotland-will-be-broken/#comment-18371

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RBS and Santander part of an additional £5bn PPI giveaway from Osborne?

...Analysts at Investec predict Lloyds could be forced to make another £2.5billion provision, having already set aside £13.9billion, while Barclays could make another £1billion provision, having booked a £6billion charge already.

HSBC is expected to take a fresh hit of up to £500million, topping up its £2.63billion provision.

The new round of payouts follow City watchdog order that banks must compensate customers for secret commission charges on PPI policies. It follows a High Court victory by widowed college lecturer Susan Plevin. She was not told that almost £4,200 of the £5,780 she paid out in PPI premiums was commission paid to the lender, Paragon Financial Services, and the broker that sold her the £34,000 loan. The court ruled in November 2014 that this breached the Consumer Credit Act 1974.

The ruling has serious implications for Britain’s biggest banks, which pocketed large commissions for selling PPI policies through branches or paid brokers to sell their products. A controversial two-year time bar on PPI mis-selling complaints is also set to be introduced in the spring, with the final deadline likely to fall in 2018. This will be accompanied with a major national advertising campaign – paid for by the banks – which is expected to generate a fresh wave of complaints.

Richard Lloyd, executive director of consumer group Which?, said: ‘News of these staggering new provisions for PPI mis-selling from the banks clearly show just how many consumers are yet to be compensated. If a time bar is to be introduced, banks must redouble their efforts and prove their customers are receiving fair and speedy compensation.’



Read more: http://www.thisismoney.co.uk/money/news/article-3419769/Banks-face-new-5bn-PPI-bill-Flood-new-claims-way-triggered-High-Court-ruling.html#ixzz3yUVJWFan


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RBS are now about 24p

Only twice their value at very depths of almost shutting the doors in 2008.

That's not too encouraging.

I think banks are falling knives.

Once they start to fall they go Poof!

Thats the problem with leveraged businesses.

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Thanks for the link the bit where he covers all the past promises about RBS was quite revealing about the lies that have been spun.

If we jump into the TARDIS of Dr.Who then we see this from Chancellor Alistair Darling in the Guardian on the 13th of October 2008.

There is every reason to be confident that, as we go through this, the British taxpayer will get his money back.

If we look at the review of 2012 by The International Financing Review then things were apparently on track.

In some ways, however, RBS is well ahead of the pack…….RBS was forced to concentrate on what it was good at and should come out of its current (second) restructuring as one of the more efficient banks in the industry.

My old employer Union Bank of Switzerland had a go too back then.

However, with 2013 expected to be the last year of significant restructuring for RBS, it is likely to be one of the first European banks to have dealt with legacy issues

If we advance to the figures released in January of 2014 we see that BlueBullet on Twitter had a wry take on events.

Dear Dragons Den, I have 80% share. Losses this year are £8 billion. I am paying out £0.5 billion in bonuses. Would you like to invest?
https://twitter.com/search?q=%23RBS&src=hash' rel="external nofollow">

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http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/12126734/Deutsche-Bank-slumps-to-6.8bn-annual-loss.html

Deutsche bank down £5.2 on the year.

makes you wonder what these banks will report when Greece finally goes pop.

I mean if you can't even make a profit during the good times..........

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