400 million pound loss for RBS

[New York Red]

Royal Bank of Scotland, Man Group and Nomura on Monday joined a growing list of financial groups acknowledging exposure to the alleged $50 billion (33.3 billion pound) fraud surrounding Wall Street trader Bernard Madoff.

A report in the Financial Times said HSBC Holdings had emerged as one of the largest victims, with potential exposure of about $1 billion. HSBC could not immediately be reached for comment.

RBS said its potential loss could amount to some 400 million pounds, if it assumed that the value of its assets in market-making firm Bernard L. Madoff Investment Securities were nil. Man Group estimated its exposure at $360 million.

 

 

The Madoff scandal is hitting everything including our owners ability to secure funds. I think they are going to have massive troubles refinancing in the new year. They simply won't be able to.

[Falconhoof]

I'm not so sure about this refinancing problem that Hicks and Gillet are predicted to have. If they have been servicing the debt so far and have put up assets against default then RBS gain more by refinancing for another period.

Its steady income for the bank to continue this lending isn't it ? Finance experts please correct me if my reasoning is faulty.

[Knoxy]

Even if they can refinance they'll almost certainly pay far more interest than previously. Which could be bad news for us

[muleskinner]

I'm not so sure about this refinancing problem that Hicks and Gillet are predicted to have. If they have been servicing the debt so far and have put up assets against default then RBS gain more by refinancing for another period.

Its steady income for the bank to continue this lending isn't it ? Finance experts please correct me if my reasoning is faulty.

 

I'm no expert, but isn't Gillett's security on the refinancing a loan that is now up for sale ?

[Molby]

banks will look for excuses to recover loans and especially hike up interest rates on extended or renegotiated loans

 

RBS can simply pull the plug, then a sale will ensue, with RBS security well covered and the Yanks losing their shirts

would be beautiful

[Murphman]

banks will look for excuses to recover loans and especially hike up interest rates on extended or renegotiated loans

 

RBS can simply pull the plug, then a sale will ensue, with RBS security well covered and the Yanks losing their shirts

would be beautiful

 

 

THAT depends on who buys.

[SkippyjonJones]

I’m still trying to work out how that size loss to RBS (given the amount they have on their books) directly affects any financial agreements between RBS and the Owners of LFC.

 

 

Probably because it doesn’t and the 2 are entirely unrelated. Theres been worse threads started… not by much though. It’s the financial equivalent of the off season rumours

[New York Red]

Gillett may well be connected to Fairfield-Greenwich. I know for a fact that he has indirect ties to it.

 

In addition, the banks are just looking for any excuse they can to bail out of risky loans. Now is the time to take your lumps.

 

These jokers are hardly bastions of stability anyway, particularly in a market like this. If RBS can force their hands, they will. RBS will be in no mood to re-up thse guys when the news keeps getting worse and worse.

[SkippyjonJones]

are you speaking for all 170,000 employees of RBS? or just the very few that might deal with this transaction.

 

 

I know a couple of senior guys in the US at a RBS company but wouldn;t dare to speak on their behalf..

[Eskimo]

Agree with Skippy in the grand scheme of things £400m is a drop in the ocean for RBS as is the loan, credit crunch or not.

[New York Red]

are you speaking for all 170,000 employees of RBS? or just the very few that might deal with this transaction.

I know a couple of senior guys in the US at a RBS company but wouldn;t dare to speak on their behalf..

 

My guess is that their underwriting and risk strategy is very different now compared to what it was just a few months ago. I'd also guess it is going to be very different to what it was last week come to think of it.

 

I'm not speaking for anyone at RBS. The only person I know associated with them is the face in their advertisements, and trust me, he knows nothing about any of this.

 

My guess is that they will want to take their lumps now like everyone else, bundle up all the bad news and take it as a one-time, and strategize for the future with for less risky loans.

 

Just a guess like...

[CaptainXabi]

Do you really think G+H's loans are risky compared to MBSs leveraged 60 to 1? The banks have far bigger problems.

[muleskinner]

Do you really think G+H's loans are risky compared to MBSs leveraged 60 to 1? The banks have far bigger problems.

 

Nobody knows what the banks think of the clubs current financial situation or what they intend to do or not do about it, certainly not anyone on these forums. That much has been proven over and over again.

[Mike]

Nobody knows what the banks think of the clubs current financial situation or what they intend to do or not do about it, certainly not anyone on these forums. That much has been proven over and over again.

 

one poster does

[muleskinner]

one poster does

 

In private maybe some do, but I'm talking public postings.

[CaptainXabi]

Nobody knows what the banks think of the clubs current financial situation or what they intend to do or not do about it, certainly not anyone on these forums. That much has been proven over and over again.

Of course. My point was that every bit of news about RBS doesn't have implications for G+H. They have plenty of issues on their plate.

[Cobs]

one poster does

 

Fyds has left, Mike.

 

Keep up.

[liveabiglife]

Banks have no appetite to precipitate the failure of an organisation - it's bad publicity. Back in the early 90's they would appoint Administrative Receivers quite readily, but that changed toward the end of that decade; RBS in particular became very reluctant to make appointments. In the current climate, if finance payments are being met, the security is still sound and the projections stack up, I would say they will not exercise any fixed or floating charges, and would be unlikely to risk a shortfall on any return by forcing a sale - and thereby forcing a lower price.

 

They would also be unlikely to be in favour of the courts appointing Administrators because of the bad press and damage to the brand that is LFC, given that it is that brand that offers huge weight and substance to the value of their security. I would also think that the interest payments may go down, not up, given the direction rats are moving in.

 

I can't substantiate any of that with fact, but that is my opinion given what I know of the insolvency business.

[growler]

Just a quick point, the 'asset' is a strong one, the banks know that when the yanks stop being able to make the repayments, they will get their money back via sale anyway.Jusrt a Just

[yuriska]

Fyds has left, Mike.

 

Keep up.

 

I thought he was talking about Boohog?

Fyds left? Whatever for?

[whitewidow]

Over the next couple of years there will be a very large number of leveraged loan back orgs who will be taken under bank ownership. In fact you can pretty much throw away the rule book re how they will view the bad publicity. If they become holder and developers of organisations they will generate returns of a true nature which will counter-balance the negative aspects of how they came to hold the asset in the first place. Been a lot written in the financial press in the past few weeks.

 

Times are changing which will be both bad and good for us - interesting definitely.