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RBS Makes £3.5 Billion Loss, Pays £1.3 Billion of Tax Payer Cash as Bonuses

Companies / Banking Stocks Feb 25, 2010 - 02:24 AM GMT

By: Nadeem_Walayat

Companies

Best Financial Markets Analysis ArticleThe tax payer bailed out and 84% owned RBS bank declared a loss for 2009 of £3.6 billion. The loss would have been infinitely larger had the government and the Bank of England had not bend over backwards to engineer a banking system that effectively funnels cash into the bankrupting banks balance sheets. Despite the headline loss and despite the fact that ALL earnings are directly as a consequence of the tax payers ,RBS STILL paid out a bonus of £1.3 billion which illustrates why nothing has changed amongst the bankster's that continue to hold the country to ransom at gun point.


It is incredulous that a bank that contributed towards crashing Britains economy and despite all of the government measures to pump tax payer cash onto its balance sheet, that still made a loss of £3.6 billion, are still paying bonuses of £1.3 billion as reward for effectively losing money. For example, it's as if someone lost £100,000 of their employers money, then instead of being sacked for gross negligence and perhaps being investigated for a fraud, instead is rewarded with a bonus of £36,000. That in effect is what is taking place at RBS and the other bailed out banks that are paying tax payer cash out as bonuses. What is even more incredulous is that Alistair Darling okayed the bonuses pot.

The £1.3 billion of bonuses is tax payers hard earned cash being handed over to the bankster's at RBS, tax payers will get the bill for all of the bailouts AFTER the next general election as the Labour Government seeks to hide the magnitude of the £1.3 trillion banking system bailout and public sector deficit spending from the tax payers in the run up to the next general election as illustrated by the below graphs which show the annual budget deficit and the growth of the total tax payer liabilities.

The updated Government projection for the annual Public Sector Net annual deficit against Alistair Darlings November 08 and April 09 targets, as well as my original estimate of November 2008 (Bankrupt Britain Trending Towards Hyper-Inflation? ) that remain unchanged.

The total liabilities as a consequence of bailing out the bankrupt banks and debt fuelled economic recovery remains on target of £4.75 trillion by the end of 2013/14, which confirms my view that to cope with the debt burden the bank of England will have to keep monetizing government debt despite the recent announcement that it will not.

RBS and other banks have hoodwinked an inept and incompetent Labour Government and bank of England into signing up to an unlimited bailout on the promise that it would lend to small UK business. However RBS is NOT doing so! as net lending at RBS is still net negative. RBS says that business don't want to borrow, this is not true, what is true is that RBS and other bailed out banks are deploying tricks to prevent business from being able to borrow, this includes inflated interest rates far beyond the 0.5% that RBS borrow at from the Bank of England, a long list of new exuberant fees and management charges to arrange and manage loans that adds to the interest rate burden on customers.

However not only are borrowers being squeezed by the bailed out banks but so are savers as inflation also eats into the real value of savings deposited at virtually ALL British banks and building societies that even now, are engaged in cutting the rates offered to savers to as little as 0.1%, as my earlier analysis illustrated (23rd Jan 2010 - UK Savers Losing Money on Virtually ALL Instant Access Savings Accounts) That virtually all accounts LOSE savers money in real terms AFTER inflation and AFTER the 20% Savings tax. That situation has continued to deteriorate even further following the latest inflation data, as savers subsidise the bankster bonuses via loss of value of savings deposited in tax payer bailed out banks.

RBS is a case in point of the failure to regulate the banks -

The Labour government has FAILED to regulate the banks

The Bank of England has FAILED to regulate the banks

The FSA has FAILED to regulate the banks

The Conservative government is in the BACK POCKETS of the bankster banks and would have FAILED to regulate the banks

The tax payers of Britain will have their ONLY opportunity at the next general election to HIT those that serve the bankster's with a SLEDGE HAMMER at the voting booth.

For more on the inflationary consequences of the bankster £1.3 trillion robbery on Britians Treasury then read the new Inflation Mega-Trend Ebook, that you can download for FREE.

The Inflation Mega-Trend Ebook is broken down into 4 chapters. Chapters 1, 2, and 3 deal with fundamental economic analysis that builds towards the Inflation-Mega-trend conclusions. Whilst the fundamental analysis is primarily focused on the UK Economy, however the conclusions are just as valid for all of the debt ridden western countries and even apply towards the major emerging economies.

Chapter 4 takes the Inflation Mega-Trend conclusions and applies them to the financial and commodity markets where further analysis develops into precise forecasts and investment trends for major markets. I had originally planned for this to be the shortest chapter of the book, however it has grown to encompass half the ebook and thus could have become an ebook in its own right.

DOWNLOAD NOW -FREE - (Only requirement a valid email address).

Source: http://www.marketoracle.co.uk/Article17476.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 500 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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