We’ve seen the good (Lloyds, debatably Barclays), and the bad (HSBC), from the banks' results this year. Now it’s the turn of the ugly.
Royal Bank of Scotland lost taxpayers and the bank’s minority investors another £7bn in 2016. That was somewhat worse than the already low expectations of the City of London, at least as defined by a consensus of analysts’ forecasts compiled by, erm, Royal Back of Scotland.
Looking for positives with RBS sometimes feels like looking for positives when your house has burned down. Well, could be worse, look the tickets for the local am dram panto at the village hall somehow survived the flames!
There are plenty who would argue that we shouldn’t even try. The rot at RBS continued to fester long after its chief cause (Fred Goodwin) was packed off to his pad in the South of France.
Scandals such as the shameful treatment of struggling small business borrowers continued to percolate long after his misrule was brought to an end, as did Libor and foreign exchange fixing.
Those who put the case for a break up so that something better could have risen from the ashes, and so that the boil of a toxic culture could more easily have been lanced, lost the battle. But they’ve won the debate.
Still, as we’ve been here so many times before, let’s try and see if we can find a pair of tickets to the Cornley Drama Society’s production of Peter Pan.
Chief executive Ross McEwan thinks they're there. “Our strategy is actually working,” he said in a video interview put out by the bank. Now you stop laughing at the back. It’s not big and it’s not clever.
Because, you know what, there is a grain of truth in that statement.
Ian Gordon, banking analyst at Investec, backs it up: “As ever, there is (we think) a perfectly respectable 'underlying' business performance buried under all this.” The "all this" being the fines, write offs, and provisions for fines that spoil the RBS party every year.
He points out that against his forecasts, RBS’s underlying profits, shorn of all the gunk, were a bit better than expected. So were the bank’s revenues.
The problem faced by RBS, its owners, and by Mr McEwan in particular, is he and Mr Gordon don't expect this half decent bank to emerge blinking in the sunlight until 2018 at the earliest. Mr Gordon doesn’t expect it to turn into something “normally profitable" before 2020.
Even if Mr McEwan wants to stick around that long, his political masters, who look after the 72 per cent stake we taxpayers hold, may not allow him to. What’s probably keeping him in post at the moment, as I recently wrote, is that there isn’t exactly a queue of credible replacements banging on the door of Number 11 Downing Street.
Mr McEwan has some notable black marks on his resume. The botched (and likely now shelved) sale of Williams & Glyn for starters. The bank’s handling of a shareholder lawsuit over its £12bn rights issue in 2008, which could and should have been settled earlier, is another. Most institutional investors have now been bought off, but a trial is due to start within a matter of weeks, because the bank has yet to conclude a deal to with small shareholders, racking up yet more costs.
That trial could yet wake some sleeping dogs. RBS really doesn't want that to happen.
Mr McEwan is planning an ambitious programme of cost cuts to help the "bank that earns your trust" and makes money to emerge in 2018. Cost cuts haven't always served RBS well in the past. Fred the Shred sacrificed customer service and the health of the bank's IT systems on their altar.
Mr McEwan had best hope that he can show some more positive results from them, because if he can't, he’s probably done. It’s one thing to say your strategy is working. But if no one can see it, and no one can feel it, it doesn’t do you a lot of good.
Now, dust off those tickets, it's panto time. D’you think they’ll sell ice cream ?
