WHY could you NOT see this coming Sir Fred? Surely a drop of conservative banker’s blood in you could have felt that it was fundamentally wrong and the process flawed. Hard to say who is more parsimonious; the Dutch or the Scots but on this occasion hubris won the day. Maybe there will be other battles but this one being so significant and so fatal will go down in history to rival the Darien Scheme; the failure of the Scottish banks; both the Royal Bank of Scotland and the Bank of Scotland go down and never to rise again.
One would have expected that someone with a small degree of vision and foresight and a seasoned and experienced player with a conservative legal, accounting and banking background could have played his hand more prudently and at least lived to fight another day. So it comes down to opprobrium at it’s worst. The RBS is ‘lost’ and if it were not for the rescue of the Chancellor of the Exchequer it would be bankrupt. And buying the ABN AMRO mess at demonstrably the wrong time of the cycle and over-paying for it to boot is decidedly “un-Scottish”. With an asset worth $40 and arguably “under-performing” reflected in the numbers, RBS goes on to offer $100! And, so proudly and arrogantly, now rue the day. “We all knew…” that it was a poorly performing asset, “we all knew…” why the institutional shareholders wanted it sold, broken up or “fixed”. RBS would still be largely intact today had it not been for this fatal error of judgment. Instead, this action not only brings down RBS but Fortis too. The only saving grace is that Emilio Botin has the vision, brains and foresight to “pick the eyes” out of Santander’s leg of the deal and turn Antonveneta for a quick profit and integrate Brazil quickly into existing culling costs on the fly. ABN AMRO Bank was in deep ordure way before RBS came along to ostensibly ‘rescue it’ (for the shareholders) and ABN desperately wanted to be ‘rescued’ by Barclays knowing it to be a far greater fate than to be vandalised by the barbarians from Caladonia north of the wall. A high price won the day, a LONG closing procedure (always to be avoided; when the window is open, jump through and then close the window again quickly for fear of being trapped halfway. Guess what?). Material adverse change in the markets handed RBS their head and Sir Fred in turn his; hung, drawn and quartered. Now what? An established, respected and venerable institution down the drain, it could take decades to recover from this debacle if at all, and how to rid the share register from public ownership?
Bank of Scotland; rival and loser of the Nat West battle a decade earlier, forgot everything taught in Banking 101 and acquired Halifax. Hell, who wants to be left behind in the merry-go-round?! Poorly led, and funded even worse, the mismatches coupled with weak leadership totally lacking vision and another venerable institution is “gone” and from this there shall never ever be a return. HBOS is gone, lock, stock & barrel and despite some valiant attempts by a few ‘well-meaning’ Scots to save the institution, could not because alas, they had no money and unfortunately talk, and ‘nation’ are not enough. We have Darien Mark II.
So, Sir Fred, take the millions you have earned and and the rest you took and did not earn and your tarnished knighthood and retire back to Paisley where you can write your memoirs of what might have been. Write about Empire…. of the RBS and the bold adventures to bring Scottish tradition in banking to the world.
Edit:
I couldn’t have put it better myself: http://tinyurl.com/bfczdj
