RBS: back in the black – and the doghouse
“How churlish is that,” asked Alistair Osborne in The Times. “Wait a decade for a profit” and then, when one “finally pitches up”, mark the shares down 5%. It wasn’t quite the market verdict that Royal Bank of Scotland’s boss, Ross Mcewan, was looking for when he announced a “symbolic moment” for the bailed-out bank, which is still 73% owned by the Government. Still, there’s no denying the progress since he arrived in 2013. This year’s £752m profit compares not unfavourably to last year’s £7bn loss – even if RBS has still to cough up an estimated £5bn to the US Department of Justice for mis-selling toxic mortgage bonds before the 2008 crisis. Until the exact number is known, Mcewan can’t consider restoring the dividend.
RBS is in a bind, said Lex in the Financial Times. “There is a decent bank beneath the fright mask,” but without a dividend the bank “cannot escape the deadening effects of majority state control”; its shares continue to languish well below the Treasury’s buy-in price a decade ago. Meanwhile, it continues to pay “penance for past sin”, with the publication last week of a damning report into its mistreatment of distressed companies.
The document on RBS’ scandal-hit Global Restructuring Group (GRG) contains dozens of examples of “the underhand and devious techniques” used to “gouge” small businesses, said Nils Pratley in The Guardian. “That the customer should be screwed was a given.” Which makes it all the more unsettling that 30 out of the 32 senior managers at RBS’ new “restructuring” unit were previously employed by GRG, said BBC News online. Mcewan promised a fundamentally different culture, the Treasury Committee said this week, but this smacks of “a rebranding exercise”.