Hobson: RBS is Disaster of the Century

Morningstar columnist Rodney Hobson says we all have a stake in RBS through the government so there is no need to hold shares personally as well

Rodney Hobson 28 February, 2014 | 2:49PM
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As financial disasters go, Royal Bank of Scotland (RBS) will take some beating. While the Lloyds (LLOY) ‘Deal of the Century’ was more ludicrous at the time, the attempt by RBS to become a leading world bank has had far more serious consequences – consequences that continue to haunt it.

Its sixth annual loss in a row comes to £8.2 billion, its second worst since the financial crisis. Even if you strip out the one-off bills for mis-selling and bad loans, RBS still lost money.

A loss of £8 billion is so large as to be virtually meaningless. What it does mean, in terms that one can understand, is that this is a really lousy investment even before you consider that the government will at some stage attempt to cut its losses by dumping shares onto the market.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
easyJet PLC596.60 GBX-0.53Rating
International Consolidated Airlines Group SA156.06 GBX-2.56Rating
Lloyds Banking Group PLC48.73 GBX0.84Rating
NatWest Group PLC230.30 GBX0.79Rating
Ryanair Holdings PLC15.97 EUR-0.71Rating

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.