I normally hover around about the -£6000 and this goes up and down throughout the year. I run a small business and have an overdraft facility of £13000 with RBS for which I pay for each year. Sadly, given a few good years it will probably all happen again. In the meantime every single one of us is paying the price for the greed and incompetance of a few. Let us just bear in mind if they don`t get it chances are they don`t deserve it. Micawber could have taught Goodwin, Hornby and Applegarth a thing ot two about high finance.ĭon`t get me wrong, I believe some debt is good as long as it is sensible for both sides of the loan arrangement.ĭoubtless we will still hear people saying they can`t get a loan and complaining loud and long. A lending proposition either makes sense or it doesn`t, chasing targets is the reason banks overextended themselves, safe in the apparent knowledge that it would all work out ok in the end.Īs we all know now, and some us knew for some time before that, it was always going to end in tears. It always seemed stupid to me that the answer to too much debt sloshing around was to set targets for lending. If businesses and individuals are borrowing less and saving more that is good news and common sense. This looks like a big hint to Chancellor Alistair Darling, RBS's majority shareholder: time to re-think those lending targets. RBS has identified £27bn of credit available to its small, medium and "mid-corporate" customers through arranged overdrafts, which is available, easily accessed, but not being drawn down. There's a new figure from the bank that helps explain what's going on, suggesting the problem in reaching the lending targets is not the lack of willingness from banks, but the lack of demand from customers. So pushing more credit into the economy may not be the way back to growth, and probably isn't good for us anyway. The USA is out of recession, while companies are paying off debt faster than they're doing in Britain and savings are up. And he points out that's the way it should be. He's now pointing out that companies - his customers - are choosing to repair their balance sheets, and that means reducing the level of debt they're carrying. But there's an interesting new message from the RBS chief executive, as he admits the bank is struggling to hit the government's demands for ensuring lending is available to homebuyers and businesses. Impairments, or losses on loans, seem to be at a plateau, but it's a high one, at £3.3bn for the third quarter. He was told by the European competition commissioner Neelie Kroes to sell large parts of RBS, which he points out this morning cost the UK taxpayer £9bn this week alone in the reduced stock market valuation of our stake.Īnd now there's a third quarter pre-tax loss of more than £2.1bn, or (as RBS prefers to emphasise) an operating loss of £1.5bn, sharply reduced from the second quarter. The chief executive of the Royal Bank of Scotland has announced 3,700 job losses from branches and the need for at least £25bn more in government capital injection, taking the taxpayers' share of economic value (though not voting power) up to 84%. It's a week that Stephen Hester will be happy to put behind him.
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