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A TOUGH WEEK FOR SOME UK BANKS
It's been a tough week for government owned banks in the UK. UK Chancellor George Osborne announced the heavily discounted sale of Lloyds shares to retail investors planned for later this year would be postponed given the market turmoil of the past several weeks. Then, as announced in this weekend's FT, RBS announced it is on course for its eight consecutive annual net loss in 2015 after agreeing to fill a £3.6 billion litigation hit plus pension payments. The hit reduces equity by £1.6 billion and is split between £2 billion for conduct charge provisions in the US and UK and the balance for an accelerated payment to its defined benefit pension scheme and private bank write downs. The shares of both banks are trading at pre-bailout levels, in stark contrast taxpayer's experience in the US with the AIG bailout. It is amazing that a banking crisis that had it roots in the mid to late 2000s can still have such an impact upon the taxpayer and government almost ten years later. The full FT story can be found here - http://www.ft.com/cms/s/0/b83c5dda-c503-11e5-b3b1-7b2481276e45.html.
It's been a tough week for government owned banks in the UK. UK Chancellor George Osborne announced the heavily discounted sale of Lloyds shares to retail investors planned for later this year would be postponed given the market turmoil of the past several weeks. Then, as announced in this weekend's FT, RBS announced it is on course for its eight consecutive annual net loss in 2015 after agreeing to fill a £3.6 billion litigation hit plus pension payments. The hit reduces equity by £1.6 billion and is split between £2 billion for conduct charge provisions in the US and UK and the balance for an accelerated payment to its defined benefit pension scheme and private bank write downs. The shares of both banks are trading at pre-bailout levels, in stark contrast taxpayer's experience in the US with the AIG bailout. It is amazing that a banking crisis that had it roots in the mid to late 2000s can still have such an impact upon the taxpayer and government almost ten years later. The full FT story can be found here - http://www.ft.com/cms/s/0/b83c5dda-c503-11e5-b3b1-7b2481276e45.html.
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