RBS is back in the black. As a stakeholder, is this good news?

RBS is back in the black. As a stakeholder, is this good news?

What should we make of RBS’s announcement today that it is back in the black? As its 83% owned by the British taxpayers, we should have a view. The headlines are a bit confusing, speaking of a pleasant surprise, of more job cuts, of less Greek exposure, of a higher portfolio of liquid assets, of better write downs or muted response on the FTSE.

The story is being hidden by some mind boggling numbers.

  • £2 billion (Q3 pre tax profits up)
  • £1.5billion (Q3 Bad debts down)
  • £1.1Billion (Investment revenue down)
  • £4.1Billion (Retail revenue held)
  • £6.4Billion (Q3 revenue)
  • £3.5Billion (less exposure to Eurozone PIGS)
  • £28.5 Billion (Q3 new lending)

What’s the story? Q2 loss now Q3 profit – good news? No, it’s slow, steady progress. If British taxpayers are the brand owners, the key messages seem to be

  • RBS are falling behind its 5 year recovery plan – it’s a tough market for everyone (ask the LloydsTSB CEO)
  • More job cuts are due at the year-end results meeting
  • Small business loans remain muted.
  • The bad bank division is still bad.
  • Shares remain 50%

As stakeholders, we need a story we can follow. RBS is on a road to recovery where we will all hopefully benefit a little. That was the plan. Is that still the plan?

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