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Isn’t it strange that the banks that haven’t been bailed out by the Government have reported half year substantial profits while Northern Rock and Lloyds TSB still appear on their knees!
Obviously Lloyds TSB are clearing out the quagmire takeover of HBoS where the collapse of one property company alone forced them to write of £800 million of equity they had put in! So there is a lot to clear. But what the figures are masking is the fact that inherently all the banks are profitable but the “nationalised” ones are using the time under State shareholding to clean up their companies completely. This means packaging assets ready for off loading in to the Governments toxic debt vehicle and facilitating closure of final salary pension schemes, restructuring the businesses and generally having a clear out.
Why would any company given money to keep them afloat and knowing more is round the corner not use the exercise to completely clean themselves up. But while doing this the whiz kids and the banking fraternity have to keep under the radar on sponsorship, attending events and generally larging it up.
So I guess the Goldman Sachs quartet spending £20,000 celebrating their bonuses and the obvious backlash in headlines must have been very well received. Barclays are now seeing themselves on an island as staff and public start rounding – the staff on losing the final salary pension and the public on their bonuses.
And now because the banks are not out lending as they should be we are seeing a further £50 billion in quantitative easing! I am sure we are in for a long bump along the bottom and I am convinced the bankers will keep focusing on salving themselves first.
07 Aug 2009 09:51:08