RBS To Allow 3 Month Mortgage Holiday

NEW: RBS says it will allow payment holiday for mortgage payments for up to three months for people impacted by coronavirus

— Anna Mikhailova (@AVMikhailova) March 10, 2020

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RBS Falls on Government Sell Off

Markets dont like the UKGI RBS share sell-off. Shares down 3.3% this morning pic.twitter.com/oIK7uctWod

— Joe Lynam BBC (@BBC_Joe_Lynam) June 5, 2018

RBS/NatWest Closing 259 Branches

RBS/NatWest closing 259 branches. Is one in your town? Check list here https://t.co/W4R6kPQVUb and Lloyds/Halifax/Bank of Scotland announced 49 more closures on top of 100 earlier this year. Email your thoughts to moneybox@bbc.co.uk or tweet me.

— Paul Lewis (@paullewismoney) December 1, 2017

The Curate's Egg That Is RBS

The Telegraph reports that the Royal Bank of Scotland could be on course for its first full-year profit since its £45bn state bailout at the height of the financial crisis, after posting a third successive quarter of profits.

RBS posted £392m in profits for the three months to September and £1.33bn for the year to date.

However, there is a down side. RBS is still waiting to see if it will be fined by the DoJ for selling subprime mortgages. The fine is expected to be around £6BN.

RBS Shareholders Want Goodwin In The Dock

It seems that reports last week of a settlement being agreed between RBS and shareholders, thus negating the expected court appearance of a.o. Fred Goodwin, were premature.

The FT reports that the RBS Shareholders Action Group, which represents thousands of individual investors, secured a £2m deal with high net worth funders on Monday night, taking their total funding pot to about £7m to cover the cost of the trial, according to shareholder Neil Mitchell.

Mr Mitchell said that the claim is “now fully funded” and that “claimants are willing to proceed to trial”, which is set to begin on Wednesday.

It seems the desire to see Goodwin take the stand outweighs mere monetary gain.   A number of investors recently told the Financial Times they were unwilling to settle because they wanted to see Goodwin, who was stripped of his knighthood in 2012, held to account and for the “truth” to emerge.

RBS Reaches £200M Settlement

RBS has reached a last-minute deal worth about £200 million with thousands of investors who claim they were misled during the bank's 2008 rights issue shortly before a government bailout wiped out its share price.

In a letter to shareholders released Monday, the RBoS Shareholders Action Group recommended accepting the deal for 82 pence per share, below its previous damages range of 92 pence per share to 234 pence per share.

The group is the last of five sets of shareholders still pursuing claims that the bank misled investors with its £12 billion rights issue during the 2008 financial crisis, before the £45 billion government bailout wiped out RBS' share price. A trial had been set to begin in late May but was repeatedly postponed after RBS made the 82 pence per share offer on May 20.

Law360UK quotes the shareholder group's letter:

"Until this offer was made, we were not satisfied that previous offers proposed by the bank were close enough to what may be considered an acceptable amount, bearing in mind our legal team's advice as to the true merits of the case.

In contrast, we did consider that the offer of 82p per share, being almost double that of the bank's previous offer, to be worth serious consideration."

This of course means that Fred Goodwin will not be appearing in court.

Fred GoodwinTo Appear In Court

Reuters reports that Fred "The Shred" Goodwin (ex boss of RBS and ex knight of the realm) will appear before disgruntled investors in court next week.

He will become the first senior banker in Britain to be challenged in court over his role in the financial crisis.

A civil trial brought by thousands of RBS investors opens on Monday, alleging the banks' shareholders were misled by Goodwin and other former executives over the bank's financial health ahead of a £12BN cash call in 2008.

Don't expect any dramatic revelations though!

RBS Increases Provisions For Fines

RBS announced on Thursday that it has set aside a further $3.8 billion to cover expected fines from U.S. authorities over its handling of residential mortgage-backed securities in the run-up to the 2008 financial crisis.

RBS said the additional provision would mostly be for a penalty expected to be imposed by the Department of Justice and other agencies over its issuing and underwriting of U.S. residential mortgage-backed securities (RMBS) during the U.S. housing boom of the 2000s.

RBS’s total package for provisions related to the mortgage-selling misconduct now stands at $8.3 billion.

NatWest and RBS Might Charge for Deposits

Natwest and Royal Bank of Scotland (RBS) have warned businesses they may have to charge them to accept deposits due to low interest rates.

The banks are quoted by the BBC:

"We will consider any necessary action in the event of the Bank of England base rate falling below zero, but will do our utmost to protect our customers from any impacts."

Thus far personal customers are unaffected. However, that situation may change.

The move follows Dutch bank ABN Amro, which has warned its business customers that it will charge them for deposits.

As such, now is the time for people to consider lightening their cash balances held in banks and finding other means of holding wealth; eg under the mattress, or in precious metals.

UK Banks Pass Stress Test

The Bank of England has, for the second year running, conducted stress tests on seven major UK banks.

All passed.

However, Royal Bank of Scotland and Standard Chartered were the weakest and were found not to have enough capital strength. They both took steps to raise capital, and as such were not told to come up with a new plan.

Turning Japanese

Andrew Roberts, RBS's credit strategist, is quoted by the Telegraph:

“We are seeing `Japanification’ setting in across Europe.

We expect 10-year Bund yields to cross the 10-year Japanese government bond and we are amply positioned for such an outcome.” 

In theory, as economic predictions are always "theoretical", either the ECB launches massive QE in which case it will buy bonds, or it won't in which case bond yields will collapse further.

Either way, in theory, bond prices will rise.

Theory and reality have, of course, a nasty habit of becoming disconnected!

The Banking List of Shame

UK, US and Swiss authorities have fined five banks more than £2BN over failings that led to manipulation of the foreign exchange markets.

For good measure The Bank of England dismissed its chief currencies dealer following an investigation, for "breaching internal policies".

As per the Telegraph:

Total Fines

Financial Conduct Authority
• Citibank: £225,575,000
• HSBC: £216,363,000
• JPMorgan: £222,166,000
• RBS: £217,000,000
• UBS: £233,814,000
Commodities and Futures Trading Commission
• Citibank: $310m
• JPMorgan: $310m
• RBS: $290m
• UBS: $290m
• HSBC: $275m
Finma
• UBS: 134m Swiss francs

Well done lads, you are a "credit" to the "profession"!

In case anyone is wondering why Barclays isn't mentioned, it is still being investigated.

RBS Fined £15M

The Royal Bank of Scotland has received yet another fine, this time it has been fined £14.5M by the Financial Conduct Authority (FCA) for failing to ensure that advice given to mortgage customers was suitable.

The FCA said that the fine for RBS and the NatWest reflected "serious failings" in their advised mortgage sales business. The firms failed to ensure that advice given to customers was suitable, according to the FCA. Two reviews of sales from 2012 found that in over half the cases the suitability of the advice was not clear from the file or call recording.

Customers were not advised properly over the affordability of mortgages, or the appropriate term of products being offered. Others were given poor advice when looking to consolidate their debts.

Tracey McDermott, director of enforcement and financial crime at the FCA is quoted by the Telegraph:

“Taking out a mortgage is one of the most important financial decisions we can make. Poor advice could cost someone their home so it’s vital that the advice process is fit for purpose. 

Both firms failed to ensure that their customers were getting the best advice for them.

We made our concerns clear to the firms in November 2011 but it was almost a year later before the firms started to take proper steps to put things right. 

Where we raise concerns with firms we expect them to take effective action to resolve them without delay. This simply failed to happen in this case.”

The FSA initially drew the firms’ attention to issues in their mortgage advice process in November 2011. However, no effective attempts to remedy the problems were made until the end of September 2012.
 

The fine is of course paltry in terms of a bank the size of RBS, therefore one has to question whether it is in the slightest way effective in "managing" the future behaviour of banks.

RBS Executives Wilfully Obtuse

Andrew Tyrie, chairman of the Treasury Select Committee, is to write to Sir Philip Hampton, chairman of RBS, to complain about the evidence given by Chris Sullivan, deputy chief executive of RBS, and Derek Sach, head of the bank’s Global Restructuring Group (GRG) in June;accusing them of being wilfully obtuse.

Tyrie is quoted by the Telegraph:

“If this is how RBS deals with a parliamentary Committee, how much can customers and regulators rely on it to be straightforward with them?

I will be writing to the Chairman of RBS about this, and the Committee will report on it after the summer.”

The executives were originally summoned by the MPs to answer a number of allegations about the treatment of small firms by GRG contained in two highly critical reports on RBS.

One report by Lawrence Tomlinson, a Government adviser, alleged that the bank’s GRG division was forcing small businesses into administration so that the bank could take their properties and sell them for a profit.

Tyrie also said:

“Following the Committee’s decision to write to Sir Andrew Large for clarification, RBS has now offered the Committee what it euphemistically describes as ‘additional comments’. 

In fact, they have done a belated U-turn. It’s not as if the facts have changed. 

So it now appears that RBS has been wilfully obtuse with the Committee.” 

The financial services industry in the UK is quite simply a crock of shite!

Banks Do A Wonga

The Telegraph notes that after revelations that Britain's high-street banks issued legal letters from what appeared to be independent law firms demanding that they repay money owed to the banks, the chairman of the Treasury Select Committee, Andrew Tyrie, wrote to the banks asking for an explanation.

The letters, despite being headed with names that make them look like they are from separate law firms, were actually from the banks' in-house legal teams.

In his response to Mr Tyrie, Lloyds chief executive Antonio Horta-Osorio said the bank had used the name of SCM Solicitors, a business purportedly based in Hove, East Sussex, because customers in financial difficulty did not respond to letters from the bank itself.

Mr Tyrie is somehwat less than impressed and, according to the Telegraph, is of the view that the letters were "calculated to mislead".

Lloyds claims that letters were "intended to encourage customers to speak with us".

RBS, Nationwide and HSBC also used the names of law firms when sending correspondence from their own departments. 

Cynics have noted that Wonga were not fined for their letters because the mainstream banks were all playing the same dishonest game.

Britain's financial services industry is pox ridden!

Question For RBS

Why on earth have you more than doubled your lending to Chinese banks?

£46BN Down The RBS Toilet

Royal Bank of Scotland (the bank destroyed by Fred Goodwin and his cronies) has, since it was bailed out in 2008, accumulated losses of £46BN. That sum is the same as the amount pumped into it in return for an 81% taxpayer stake in the bank.

RBS made a loss last year of £8.2BN, taking its cumulative losses to £46BN.

Losses at the bank include a £3.8BN charge for customer mis-selling compensation, and a £4.8BN impairment charge against the continued run down of its bad loans.

Ironically, despite continuing to lose money, the bank has set aside £576M to pay staff bonuses for 2013.

Whistleblower Alleges RBS Deliberately Destroyed Viable Businesses

For the first time a whistleblower has revealed how the Royal Bank of Scotland allegedly deliberately destroyed perfectly viable small businesses - in an effort to save the bank during the credit crisis.

Fred The Shred and The Round Topped Filing Cabinets

The Telegraph reports that Fred Goodwin, erstwhile CEO of RBS, was so obsessed with tidiness and so irritated with piles of paper on filing cabinets that he ordered thousands of custom-made round-topped storage units to be rolled out across the bank.

A senior manager told Iain Martin, the author of Making it Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy being published next week.

“Somewhere in a warehouse are thousands of old flat-top RBS filing cabinets that were not Fred-compliant.” 

In pre RBS days as chief executive of Clydesdale Bank, Goodwin apparently interrupted a meeting to take a call from his mother who had seen a cigarette butt left on the steps of the bank’s headquarters in Glasgow. Goodwin immediately arranged to have the butt removed.

Sadly this obsessive attention to detail didn't manifest itself in the more "mundane" activities of the bank such as credit, risk and how much is lent and to whom.

RBS Fined £5.6M

RBS has been fined £5.6M by the Financial Conduct Authority (FCA) for "incorrectly reporting transactions they made in wholesale markets".

Seemingly, between 2007 and 2013, RBS either didn't report or incorrectly reported approximately 45 million transactions!