RSS feedasset protection scheme
’The cost of an RBS bailout
A trip down memory lane.
It’s December 2009. Details of a scheme to insure £280bn of RBS’s most toxic loans have finally been announced after months of discussion.
The chairman of RBS writes to shareholders trying to explain why the bank is joining the scheme and is being forced to raise an additional £25.5bn of capital via an issue of B shares to HM Treasury.
RBS’s lingering event risk
Progress at the bailed-out RBS, in table-form:
That’s almost every risk measure improving except for one — Core Tier 1 capital. Here the bank, which has released annual results on Thursday, has seen its regulatory buffer decrease from 11 per cent in 2009 to 10.7 per cent in 2010.
Leaving the APS [updated]
RBS has moved smartly higher on Friday morning:
That’s in response to this story from the FT’s banking editor Patrick Jenkins.
Executives at Royal Bank of Scotland and officials at the Treasury
RBS and its CDO … or APS … hit
Poor Royal Bank of Scotland.
RBS has fallen victim to one of the quirks of fair value accounting in its just-released third-quarter results, in which the bailed-out British bank posted a net loss of £1.14bn,
HMT’s very own synthetic CDO
It exists.
And it’s detailed in the first ever annual report from the UK’s Asset Protection Agency (APA).
It covers the period from December 2009 to the end of March 2010, and features some great bits of detail on the UK government’s Asset Protection Scheme (APS),
Revision and APS ambiguity at RBS
Meet the new, less-risky, open-for-business RBS.
The British bank has just released its 2009 results, and the company is happily trumpeting its turn-around. It’s also boasting of a reduction in the risk on its balance sheet –something it came under criticism for after being bailed-out by British taxpayers in 2008.
Presenting RBS’s toxic assets
As you may have read, HM Treasury has released full details of the toxic RBS assets being guaranteed under the Asset Protection Scheme.
Annex A of the 100 page report (which was quietly put up on the HM Treasury website on Monday) provides the full breakdown of the £282bn assets being insured.
Taking out the trash at RBS
The UK taxpayer is now the proud owner of £19.8bn worth of monoline exposure.
And £39.1bn worth of commercial real estate.
RBS’s just-released third-quarter results have a bit more detail on just what is going into the Asset Protection Scheme – the UK government’s plan to insure state-owned banks against credit losses.
When Goldman met Lloyds…
. . . on Thursday night.
GS meeting with management. Key takeaway: “everything is proceeding according to plan with regards to the [UK Government's asset protection scheme], however, the board will always look out for shareholders and should an alternative,
Lloyds, out of the frying pan and out of the APS?
On Wednesday we mentioned that the finalised terms of the UK government’s Asset Protection Scheme would be crucial for the future of Lloyds Banking Group.
Recall that under the initial terms of the APS deal,
Laughing Lloyds
Lloyds shares were up 5.5 per cent in early trade on Wednesday, even after the bank posted higher than expected impairments on bad debt.
From the statement:
Impairments in the first half were £13.4 billion,
Opportunity Number: 37844-001
Presented – almost – without comment:
Chief Executive, Asset Protection Agency Salary £140,000 LondonHM Treasury is establishing the Asset Protection Agency (APA) to operate the Asset Protection Scheme (APS).
Risk Factor 1.3
Lloyds Banking Group will publish the prospectus for its £4bn share placing on Wednesday afternoon and all eyes will be on paragraph 1.3. It covers potential changes Lloyds could be forced to make in order to get EU State Aid Approval for this share placing,
No asset protection for Lloyds
Surely this can’t be right, the share price of a UK bank going down?
Well it is and the reason is not hard to find – in Thursday’s surprise first quarter trading statement Lloyds reveals that corporate impairments in 2009 are going 50 per cent higher than in 2008.
An impaired Lloyds
Well, Lloyds’ first-quarter trading update was never going to be spectacular. The bank, unlike its competitors, is widely expected to report negative earnings this year. In a surprise statement issued today,
Lloyds Banking Group – “Buy”
An unusual recommendation to come out of FT Alphaville, perhaps. But the investment case looks to be compelling – at the moment.
Ironically, it is from the statement released by Lloyds on Saturday regarding its participation in the HM Treasury’s Asset Protection Scheme (emphasis ours):