The worst business loss in UK history
By Russell Lynch, Press Association
Thursday, 26 February 2009
Part-nationalised Royal Bank of Scotland today unveiled losses of £24
billion for 2008 - the biggest in UK corporate history.
RBS - nearly 70 per cent owned by the taxpayer after a £20 billion
rescue - also announced plans to sell off swathes of the business.
The beleaguered bank plunged to the losses after a catastrophic year
when the crisis sparked by the failure of Lehman Brothers brought it to
the brink of collapse.
RBS racked up bad debt charges of £7 billion and wrote off £16.2 billion
on its disastrous acquisition of Dutch bank ABN Amro in 2007.
RBS shares were buoyed by details of the company's restructuring plan
and the launch of the Government's toxic-asset insurance scheme. RBS
shares were up 22 per cent or 5p to 28.1p, while Lloyds Banking Group
rose 6p to 63.4p as it is also expected to participate in the scheme.
Lloyds is due to report full-year figures tomorrow.
Derek Simpson, joint leader of Unite, said: "These historic and
humiliating losses bring into sharp focus just how reckless RBS's former
management team have behaved.
"The whole country is paying the price through job cuts and
repossessions on a massive scale. It is time to take control and fully
nationalise this bank.
"You cannot have a state bailout on one hand while allowing the spectre
of thousands of job losses to loom over staff on the other.
"The Government has set a precedent for intervention in the day-to-day
running of RBS. They must now intervene to protect the workers in call
centres, branches and back offices who are the victims of the credit
crunch, not the culprits.
"The staff at this bank should not have to pay with their jobs. We will
vigorously oppose any compulsory redundancies.
Mr Simpson said the union "was extremely frustrated" about the lack of
any firm details about jobs, adding: "The uncertainty hanging over the
heads of these workers is unacceptable.
RBS also said it intended to place £325 billion in toxic assets into the
taxpayer-backed Asset Protection Scheme to help take risks off its
balance sheet.
In return for taking part in the scheme, RBS has agreed to lend £25
billion over the next 12 months.
But chief executive Stephen Hester also announced plans to cut £2.5
billion in costs across the business by 2011 as he attempts to restore
the ailing group to health.
This will "regrettably" involve further job losses, Mr Hester added.
RBS is planning to make a "non-core" division of assets worth around
£540 billion which it plans to wind down or dispose of over the next
three to five years.
Most of the divisions and assets to be sold will be from RBS's
investment banking division, and the bank will end or drastically reduce
its presence in 36 of the 54 countries in which it operates.
Mr Hester said the "primary task" for RBS would be to rebuild its stand-
alone strength so the Government could sell down its shareholding in the
coming years.
But he warned: "To make any forecast is hazardous, beyond the
expectation that 2009 will be a very tough year for the world economy."
Http://www.independ
in-uk-history-
Thursday, 26 February 2009
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