Hester says RBS 'nearly died' as shares dive

Shares in Royal Bank of Scotland slumped more than 5pc on Thursday morning as the City was unnerved by the departure of Stephen Hester, the lender's chief executive.

In early trading, shares in the state-backed lender dropped 5.4pc to 308p as the market got its first chance to react to Wednesday evening's announcement that Mr Hester will leave the bank by the end of this year.

ryeatley: Is this possible privatisation going to be a bribe to the electorate? If so, I'll take the money, thanks - and continue to vote UKIP. I may even pass the proceeds on to them!

aramiska:  Yes yes , they privatize away what is ours. They privatize away and then they make us pay. Then we buy it back some day… Musical history lesson ¬ http://youtu.be/IlkXQm7tSCY Flodden !

Russell: I wish Sky tv and the BBC would remind viewers that the £1.6 million bonus and other payments to Mr Hustler were agreed to in 2008 when Labour signed the taxpayers up to his contract. Whilst at it, perhaps they could also mention that the Libor scandal and PPI frauds as well as the mess in the Corporate tax system was left over from  Labours 13 years in office, plus we had NHS Stafford and the £6million wasted 'review' of heart operations/hospitals. All in all Labour left a trail of disaster in almost every area of government and yet their representatives such as the hypocrites Balls/Hodges/ Burnham/Johnson/Myners etc are never questioned and humiliated as they should be. Perhaps even the dimmest voters might then grasp the damage labour does when in power.

sean72: Dont forget the poor British citizens who were forced to loan money they could never pay back. None of it is their fault of course. How could anyone expect people to borrow money and not realise they could not make the repayments on those loans. People reap what they sow at the end of the day…

aramiska: RBS was used as a Dump for all the toxic loans and failed derivatives by all the other Banks at the time of the  500 billion, 2008 United Kingdom bank rescue package. Yes 500 billion folks, where did all that funny money go ?Then once the Banks had offloaded all their crap into RBS the Government nationalised it, cunning plan a la Balderick. Then Hester the court Jester comes along and inanely grins his way through the next 4 years, and the British public well… baaaa.

rowls76: Not sure where you get your £500bn figure from, but in terms of where the money is now: 1 - The bail money provided directly to the banks was used to buy share capital which we the taxpayer now owns. We should get that back when the shares are sold (unless sold at a loss obviously!) 2 - The Special Liquidity Scheme (SLS) (c£185bn) was loaned to the banks with collateral posted in the form loan portfolios. This has now been repaid by the banks to the government with interest. 3 - The Asset Protection Scheme (GARP) never involved money passing from the taxpayer to the banks but provided insurance on dodgy loan portfolios (c£1tr). As these never went as bad as expected, the banks never claimed on the policy leaving the taxpayer with the premiums paid by the banks for the cover of several billion. Not a bad deal all in all…

Archie_Douglas: I suspect the figure was dreamt up like the figures for civilian causalities during the Iraq War which were 6 x over the actual figure.  Your bullet comments seem to be the most encouraging I've seen - I wonder whether they can be verified

aramiska: >Sighs< Do I have to do all the research round here ¬https://en.wikipedia.org/wiki/2008_United_Kingdom_bank_rescue_package `A bank rescue package totalling some £500 billion (approximately $850 billion) was announced by the British government on 8 October 2008, as a response to the ongoing global financial crisis.` Oh and the bailout 500bn money was actually used primarily to counter-party the shite assets that RBS bought off all the other banks as a backdoor recapitalization as outlined above ( apart from HSBC who took the Qatari dinar ). I should know it was my idea, altough I never got paid for it or allowed my intellectual property to be used, hence that Occupy malarkey started up in the City, capishe ?

rowls76: OK… So of the Wikipedia figure of £500bn: £200bn is the initial estimate of the SLS (Now repaid) £50bn is the bank recapitalisation fund (that's the shares in RBS / Lloyds / NR) £250bn to underwrite UK interbank lending - which presumably wasn't called on as there were no further bank insolvencies. If it was used to collect rubbish assets from the other UK banks then I guess it they will either have been written down in the RBS books (leading to a loss), or still not fully written down (with a loss still to come). So I guess that reconciles our figures - although I would say that the initial suggestion that £500bn has somehow gone somewhere never to bee seen again is a bit overly pessimistic! PS - HSBC didn't need to recapitalise as the had vast reserves from their Asian operations - It was Barclays who took the Qatari dinar.

aramiska: OK…my 2p because that`s all £1 is worth after Quantitative Easing of the population into a state of stupor. Excuse my crude quoting  of you rowls good sir : `£200bn is the initial estimate of the SLS (Now repaid)` ¬ via artificial inflation of stock indices by pumping printed money into the LSX et al and that scam where they make money off falling share prices without ever holding the stock but leasing it for nanoseconds off Pension Funds ¬ is it CDO or COD or HFT some similar 3 letter acronym? £50bn is the bank recapitalisation fund (that's the shares in RBS / Lloyds / NR) ¬ the actual value of these zombie banks once they have piled them high with `troubled assets` without mark to market scam, which inflates the notional capital/share price by means of QE scam outlined above. £250bn to underwrite UK interbank lending - which presumably wasn't called on as there were no further bank insolvencies ¬ buying all the crap assets that RBS and al can lay hands on before the CDO`s blow up and AEG underwriter crashes. imho

suchan104: To answer your original question I did some research you didn't manage to do ;-) http://www.nao.org.uk/highlights/taxpayer-support-for-uk-banks-faqs/ As of 31/3/12 taxpayer support for the banks was: £109.17 bn in guarantees £118.16 bn cash outlay £228.03 bn TOTAL Of course that will have been reduced since then.  The cash outlay was mainly for the equity stakes in Lloyds and RBS, so it will be interesting to see how much of that is recovered by the Treasury. Also I thought it was Barclays who took the Arab money for recapitalisation rather than HSBC?  AFAIK HSBC didn't receive a bailout or additional capital from anywhere.

aramiska: Thanks suchan ! you`re an inquisitive fellow who must be working in the City wondering if you should go short or long on UK plc during your lunch break. My advice, bail out go East ( like physically go ). You see in error you went to the NAO for your factules which is linked to the ONS remember, `lies damned lies and statistics`. Incidentally the theme of Big Brother 2013 is `Secrets and Lies` so it should be an interesting summer. As for HSBC and Qatar, maybe that`s a need to know and apparently you dont x2 imho.

ryeatley: If there's going to be a privatisation, the No. 1 question is: Will we get our money back? If no, then the time is not ripe for privatisation.

kingorry: And this folks is why government should never be left to run any enterprise.

bigron: Fractional reserve banking is about creating money out of thin air. That should be a function of state, not some grandiose, and fraudulent international banker.

kingorry: Government's job is spend money out of thin air, judged by current behaviour. So you are almost right.

morgan: It's not Mr Hester that has saved this rotten institution, it's the hundreds of £billions taken from the British people.

boyblue: Who would make a better job of running RBS?  Hester looking for full value for taxpayer or Osborne looking for political quick fix at any price?   Indeed who would make a better job of running the treasury?

bigron: Shysters have looted the west with their fraudulent banking system, and you suggest giving them more power? What is required are elected representatives of our people being democratically responsible for the creation of our money supply. The power to create money out of thin air transcends both democracy, and capitalism. 

reductioadabsurdum: Talking to former RBS staff I came to the conclusion that Hester, who was a Labour appointee and ex-Northern Rock, is roundly disliked within the bank, I was told that most of the employees refuse to even speak to him.   As Russell comented upon at the beginning of this thread, regardless of Osborne's failings or not, this and just about everything else plus lots we know nothing of, or ever will, are all the creation of the previous Labour administration. Of course the lickspittles in the broadcast media are not going to seriously challenge Labour ex-ministers, God forbid. Instead they conveniently forget reality and indulge their Tory hating tactics, as usual. The rest of this particular tale will ultimately fade away, because I suspect, much worse will occur in due course. Meanwhile those who have insufficient funds or are not already deeply indebted are being tempted by the government's 5% deposit scheme on new builds plus adapted mortgage lending to accomodate the punters. These persons are being suckered into borrowing against hypothetical property values that might or might not hold up, especially at the lower end of the scale. You might well ask why this is being offered given the inevitable consequences of even more private debt to that end of the socio/economic scale that does not have even the proverbial pot to piss in.  More pertinently this is not the Treasury's money, rather, surprise, surprise, it's our money again. As ever we are being bribed by HMG with money taken from us in taxes. How is all this money going to be recovered or accounted for, answer it is not because it literally does not exist or ever has done. Just obligations, figures on a screen and now so called QE bank notes. Yes our money has been used, but it is just the denominations on worthless pieces of paper/cloth hybrid promissary notes. Up till now these notes have been honoured and if necessary they will just print more, as they are doing, but there is nothing behind it. As an aside gold and silver have been the object of official opprobrium, those in charge don't want you to buy it and the market is being manipulated. This has lowered the value and makes the mining less economically attractive, thereby creating a relative shortage. Hence the so called gold bonds or gold convertible bonds which like bank notes are nothing more than bits of paper, supposedly backed by actual gold, which as yet often does not exist as reserves are depleted. Yet behind the scenes those in charge and their chums are buying as much of the real stuff as they can, ditto the wealthy Indian and Chinese. Essentially we cannot trust British banks any more than we can trust the politicos, HM Treasury and the entire panopoly of British governance. I am forever anti-socialism but the reality is that these institutions, banks and other corporate interests are strangers to truth and integrity, it was ever thus for the average earners and we have nowhere to turn to or rely upon in this country.