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?