Feeds

Small biz still struggling for funding as RBS flounders

Last roll of the dice for UK economy

The Essential Guide to IT Transformation

Royal Bank of Scotland has recorded the largest loss in UK corporate history and is being bailed out again by the Treasury, while small and medium businesses are still struggling to get hold of credit.

RBS lost £40bn before tax in 2008, despite two government bailouts, on a total income of £25.8bn - after excluding parts of the disastrous ABN Amro takeover this falls to a £24bn loss.

RBS group chief executive Stephen Hester admitted the government, already the majority shareholder, could end up owning as much as 95 per cent of the bank "depending on how things work out".

The bank promised to cut £2.5bn from annual costs - part of which is likely to hit the IT department and other back office expenses - RBS already employs 10,000 people in India including over 1,000 in application development.

The UK Treasury is bailing out the bank with more funding, and will underwrite £325bn of dodgy RBS assets. The Treasury will also hand over £13bn in cash and subscribe to another £6bn in options. In return RBS pledges to make £9bn in mortgage loans and £16bn in business loans.

Minister for the death of the UK economy Lord Myners is also giving further details today on the broader Treasury underwriting of toxic assets. The UK taxpayer will underwrite up to 90 per cent of bank losses on certain assets.

Banks can apply for this protection in return for a fee, and promises to increase lending to homeowners and businesses. More details here.

This is seen by many observers as the government's last chance to achieve its objectives the first bank bailout in October also promised to force banks to increase business lending.

Meanwhile, evidence is emerging that the government's previous £1bn Enterprise Finance Guarantee is failing to have much impact on SME's ability to secure funding.

Kevin Dickens, chairman of UK 200 group, told Accountancy Age there was still a lack of information and preparedness about the scheme at all UK banks.

RBS's ex-chief executive 50-year-old Sir Fred Goodwin is also under fire this morning for collecting a £650,000 a year pension. ®

Gartner critical capabilities for enterprise endpoint backup

More from The Register

next story
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?