Question RBS to be completely nationalised today?

[rynnor]

The shares are now 22p each - soon to be 5 for a pound - seems to me this is going the way of Northern Rock?

 

[Uara]

Think they were saying on the news this morning that its going to go up from 55% ownership up to 70%, but at this rate may well end up completely nationalised!

 

[Macey]

I think theyre trying to hold on to as much as possible so that the Llyods merger can go through and "save" the bank as much as possible...who knows though, anything can, and does, seem to be happening at the moment.

 

[rynnor]

15p each now - think I'll paper the spare room in RBS share certs - cheaper per m2 than anything else and a nice talking point

Next stop 7 RBS shares per 1£...

Edit - 7 hit already now - guess we may see 10p by end of trading?

 

[Uara]

lloyds banking group is also down about 35% today, shares down to 64p, not looking very good at all

EDIT: Altho don't worry, Domino Pizza is up 5% nearly

 

[rynnor]

12p and falling and only 2pm - must go today surely?

Sell sell sell - youll get nowt from the govt if it nationalises...

 

[Zenith.UK]

That's probably what's happening... investers dumping their shares because a nationalised bank = no dividends.

The Jeremy Vine show on Radio2 this lunchtime was entertaining. There was John McCririck going on (in his commentator style) about giving money to the people directly to spend instead of through the banks. Nice idea, but ultimately pointless. If banks started dropping like flies, then people with mortgages might find themselves in the tough position of having to remortgage with a limited number of lenders with a limited number of products on the market. It's bad enough now, I'd hate to think what it would be like if the banks were just left to their own devices.

Ironically my mortgage provider was a subsidiary of Lehman Bros., but the servicing of the mortgage is a different company. Obviously my mortgage is already "on the market" as a trading commodity otherwise I'd be asked to pay off my mortgage already.

If there was a nationalised bank, would you bank with it knowing it had the guarantee of the State behind it?

 

[Mey]

I think theyre trying to hold on to as much as possible so that the Llyods merger can go through and "save" the bank as much as possible...who knows though, anything can, and does, seem to be happening at the moment.

Lloyds Banking Group owns HBOS.

(HBOS being Halifax bank of scotland not RBS).

 

[Jupitus]

Trading at 10.4 now...

 

[rynnor]

I think they'll probably survive the day but not the week - not like the markets going to love them any better tomorrow...

 

[Jaberwocky]

As long as we don't end up with a run on RBS's various banks I should think they'll be ok, it might end up fully nationalised in all but name. But as soon as it becomes financially viable the government will re float it back on the open market, hopefully with a tidy profit for the tax payer, most of their losses come for writing off the £25 billion used to buyout that Dutch bank last year.

 

[Vae]

Other countries e.g. Germany and Austria have stateowned banks (or partly state owned anyway - Sparkasse in Germany and Austria).

The company I work for is with RBS via Natwest. For the past 6 months I've been keeping track of the state of all the UK banks and paying any liabilities we have immediately that cash is available in order to minimise any potential loss. In my opinion if the government do nationalise it then I'd consider if more secure than other banks. When the government bailed RBS out the first time it meant that this bank wouldn't be allowed to fail (not that I'm sure any of the big banks will be either) and thus from that point onward I'd consider us safer with RBS than other banks.

I do take the view that a fair amount of write downs being incurred are because of mark-to-mark accounting whereby assets are revalued to the market price (which is bugger all at the moment in some assets) regardless of whether the underlying assets (e.g. mortgages) might eventually be paid in full. Therefore I wouldn't be surprised in 2-3 years time to see banks with large revaluation gains as certain markets recover.

 

[rynnor]

If it survives and remains 30% privately owned then I would agree that money will be made by its shareholders eventually though I think in the next few years is probably overly optimistic.

Banks post credit crunch will never be as profitable as before, will not be able to lend as much and wont be able to raise money on the money markets - they should be back to what they once were. Low profit, high stability shares.

 

[Rulke]

As an RBS employee, all I can say is ...


uke:

 

[old.user4556]

Scary times, 12p a share?

Sheesh.

 

[Furr]

Don't panic! it could be worse... erm... Ok it's bad... Buggered economy is very much Buggered,

 

[old.user4556]

10p today.

Fred Goodwin needs to be hauled up and thrown to the wolves.

 

[Stimpy]

I need to go get quite a bit of money out my account tomorrow for a car I hope they still have some

 

[rynnor]

As an RBS employee, all I can say is ...


uke:

It could have collapsed last year - your in a much better position now since your working for a company thats guaranteed to survive the crunch.

I wouldnt take their employee share options tho...

 

[Furr]

Who thinks the government will initiate "quantitative easing" (Printing money) within the next 4 weeks?

 

[Uara]

lol oh yes, i can see that happening pretty damn soon!

 

[SilverHood]

RBS here too (ABN Amro Americas). All I can say is "oh dear". Ah well, my unit works hard and makes buckets of money, so I'm good.

 

[Rulke]

I'm in System operations so think we should be safe too!
Still not a good position to be in.

Regarding shares; I dont have any shares at the moment (fairly new to the bank) but I did sign up for a 5 year share scheme where I put money into it every month and at the end of the 5 years I can spend that money to buy shares at an option price set at the start of the scheme, in this case 38p.

I wonder if the bank is nationalised how it'll affect that scheme...

 

[Jaberwocky]

10p today.

Fred Goodwin needs to be hauled up and thrown to the wolves.

I'm never in favour of animal cruelty, though I would find it expectable for him to be thrown to the chav's or Hoodies.

Who thinks the government will initiate "quantitative easing" (Printing money) within the next 4 weeks?

"The Bank of England's Governor paved the way last night to unleash the weapon of “printing money” in a last-ditch drive to combat the rapidly deepening recession."
http://business.timesonline.co.uk/tol/business/economics/article5556024.ece

Oh dear, that has the potential to go horribly wrong.

 

[Chilly]

I'm in System operations so think we should be safe too!
Still not a good position to be in.

Regarding shares; I dont have any shares at the moment (fairly new to the bank) but I did sign up for a 5 year share scheme where I put money into it every month and at the end of the 5 years I can spend that money to buy shares at an option price set at the start of the scheme, in this case 38p.

I wonder if the bank is nationalised how it'll affect that scheme...

Cancel it, take your money back. Even at the "discount" price, you're paying over the odds. The company is on its way to having a smaller market cap than the value of its branch offices, let alone smaller than its liabilities!

 

[Vae]

Cancel it, take your money back. Even at the "discount" price, you're paying over the odds. The company is on its way to having a smaller market cap than the value of its branch offices, let alone smaller than its liabilities!

I disagree. The way I understand these share schemes is that the money is put aside and at the end of 5 years you then have the option of buying shares at the option price. I guess Rulke has only been at the bank under a year so there's still another 4 years for the share price to come back above 38p. Even if it doesn't then he earns some interest on his money and gets it back. At any point before those 5 years are up he can get his money back with some interest.

Given the interest rates atm I doubt he'd be losing out much ont eh interest anyway whereas the potential gain from the share options could be big (and tax-free).

 

[Jupitus]

Our scheme has a guaranteed return, so you need to check the finer details.

 

[Chilly]

I disagree. The way I understand these share schemes is that the money is put aside and at the end of 5 years you then have the option of buying shares at the option price. I guess Rulke has only been at the bank under a year so there's still another 4 years for the share price to come back above 38p. Even if it doesn't then he earns some interest on his money and gets it back. At any point before those 5 years are up he can get his money back with some interest.

Given the interest rates atm I doubt he'd be losing out much ont eh interest anyway whereas the potential gain from the share options could be big (and tax-free).

The cash itself will be in some ordinary bank paying very poor interest, though, in the meantime. And who is to say RBS wont fold entirely? Fair enough if he can afford the contribs without any hassle and wants to take a punt (given its no risk, but possiblity of very low yield - worse than a cash ISA, for example).

Check the rates on the intermediary savings account (and any bonus payments etc - have they been cancelled, reduced, etc?).

I am on a similar scheme but the company I work for had the good sense to operate in a profitable and responsible manner and so the share price increases over time.

 

[Vae]

I agree that the interest rate is likely to be low (although atm who'd notice the difference!).

However look at the downside of losing say 3% interest (Assuming an interest rate of 4% is possible vs likely achieved through this scheme of 1%) versus the upside of doubling your money over 5 years (assuming a recovery in share price to say 76p which is slightly above that at which the government bought in originally) which would equate to a tax-free interest rate of 15% rather than the 4% through a Cash Isa.

I'd suggest that it would be reasonable to assign a 50% chance to RBS shares rising to 76p over 5 years and if so then the 3% downside is outweighed by the 11% upside.

Of course it depends on your opinions of the bank.

In my opinion the bank won't be allowed to go bust and the business excluding writedowns is still profitable so over the next 5 years the share price should recover.

 

[Chilly]

50% is very generous. And the profits from selling those options on the open market are certainly not tax free. From what I was told about the sharesave scheme here, any profits made are subject to standard CGT.