• chris posted an update 4 months, 4 weeks ago

    RBS. Should the gov sell it? Ten years after the government bailed out the RBS it has taken all that time to turn it around and start to make a profit.

    Admittedly it is looking at a massive fine for its part in the sub prime but after that there is the potential for filling the treasury with serious wedge.

    Rather than relying on Speed Cameras and hospital parking fees, would it not be a wise investment to keep a bank that could bring in £3bn in profits a couple of years from now?

    We did bail that bank out and spent 10 years getting it profitable again, so why sell it, and probable undervalued, to the same people who caused the issues to begin with?

    • While it is making profit I think the Gov should keep hold of it, it would be crazy not to. However you have to think if they sell it off their mates can buy it on the cheap and keep them happy and made a load of money (Royal Mail anyone).

    • You must be mistaken, there is no way something in public ownership could ever be run efficiently or at a profit. If by some accident RBS does end up making money it should immediately be handed over to those who rightly deserve to benefit, i.e. people who can afford to buy shares. Certainly wouldn’t want all that lovely profit being used to fund things like welfare scroungers.

      • You should learn the difference between public ownership, and managed.

        With it’s recent history, why would any sane government want to hang onto the Royal Bank of Scotland?

        https://en.wikipedia.org/wiki/Royal_Bank_of_Scotland#Recent_history

        • I’m perfectly aware of the difference which is why I said ownership in my post. Besides, as the owners they still have to manage to an extent .

          • Owning a majority stake in a plc is not the same as owning 100% of a private company or a state-owned utility. 29% of the company is owned by private investors, which means your pension. Anything other than an orderly disposal would be damaging to people’s annuities and, in any case, it will not be easy for the government to offload their stake while RBS remains under threat of further fines.

            Furthermore RBS’s share value is only 67% of its book value (think balance sheet), ie it is undervalued. Professional investors would point out that the time to exit should be when the price exceeds the book value, typically by a ratio of 1.5:1 although in the case of banks 1:1 would be more usual as the assets are chiefly liquid instruments.

            Sometimes however, other pressures, political or financial, take precedence.

      • “Certainly wouldn’t want all that lovely profit being used to fund things like welfare scroungers.”
        Your a jackass.
        That lovely profit could go to NHS funding. I’m guessing that this is a more realistic objective than reading lies printed on a big red bus?

    • If RBS is going to continue to be run as a normal full service bank then it should be returned to private ownership when the government can get good value. This may mean waiting until there is less uncertainty about mis-selling fines.

      I think the government should only keep hold of RBS if it intends to create a new girobank to ensure that just about everyone can have a bank account

      • “If RBS is going to continue to be run as a normal full service bank then it should be returned to private ownership when the government can get good value. This may mean waiting until there is less uncertainty about mis-selling fines.”

        Why????

        • Firstly, because that was the basis on which it was nationalised.

          But also, I think banking is a competitive marketplace, and therefore the government does not need to be competing in this market place on a like for like basis. Because of uncertainty, it is probably undervalued, so now is probably not the best time to sell.

          If RBS is set up to cater for a different role – banking for the poorest in society, or reducing costs of the benefit system, the answer may be different.

          I’m not against government ownership of vital services and natural monopolies, but I don’t think we need a nationalised merchant banking facility.