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RBS posts record £40bn pre-tax loss

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  • RBS posts record £40bn pre-tax loss

    and the stock is up 24% on this morning's open. Nothing like a government guarantee to keep the illusion going:

    RBS posts record £40bn pre-tax loss

    The Royal Bank of Scotland has reported a £40bn loss before tax - the biggest in UK corporate history. Net losses, which come after tax and interest and other charges, came in at £24.1bn.

    The loss compares with a £9.8bn pre-tax profit in 2007 and comes after £32.6bn writedown of assets, mostly related to its ill-fated decision to buy ABN Amro for €71bn (£63bn).
    The previous record annual loss for a UK company was £14.9bn.
    The bank, now 70pc owned by the state after a £20bn bail-out, unveiled a sweeping restructuring plan.
    This included placing £325bn in assets in a state insurance scheme. Under the scheme designed to extent another lifeline to banks, RBS will be responsible for the first £19.5bn of losses - or 6pc of the asset value.
    The taxpayer will bear 90pc of any losses after that, and RBS incur the remaining 10pc.
    RBS will also shift £240bn of non-core assets to a standalone division. These will be sold or run down over five years.
    As many as 20,000 jobs could be lost after RBS said it planned to cut costs by £2.5bn.
    News of the bank's huge loss follow the BBC's revelation about the scale of former chief executive Sir Fred Goodwin's pension fund, said to be worth £16m. His decision to buy ABN Amro has been widely blamed for making RBS more vulnerable.
    The BBC has learned Sir Fred has begun drawing his £650,000-a-year pension.
    Treasury Minister Stephen Timms said the government was looking at ways of "clawing back" his payments.
    RBS's expected 2008 annual loss compares with its £9.9bn profit in 2007 and £9.2bn profit in 2006.

  • #2
    Re: RBS posts record £40bn pre-tax loss

    why claw it bac? just send MI-5 for a persuasive visit.

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