How today's results could spare Sir Fred a visit to the tumbrils

OFF to the tumbrils for Sir Fred Goodwin, as the baying mob of analysts, shareholders and fund managers demand his head on a platter?

Or might he emerge as a beleaguered hero, with a set of half-time results less worse than widely feared in the markets?

The Royal Bank of Scotland chief executive takes the public stage this morning with the unenviable task of unveiling results against the most problematic trading background for a generation.

Back in April, RBS revealed it had made a provision of £5.9 billion against US subprime related losses. Some have suggested it could be reporting the biggest loss ever by a UK bank.

But if, as the annual meeting statement hinted, trading across the bank's divisions has continued to hold up well, the losses might not be as big as some have warned.

Bank analysts expect pre-tax profits before non-recurring and non-cash items and writedowns of £4.9bn. The announced write-down of £5.9bn would push RBS into the red to the tune of £1-1.5bn after allowing for that subprime write-down and provisions on its UK loan book.

If the analysts are being too cautious and RBS emerges with losses of less than this – perhaps through better-than-expected efficiency savings through the ABN integration – the relief would be palpable.

Shares in RBS closed down 1.25p at 233p last night. While this is 55 per cent down on a year ago, it is 61 per cent up on the 52-week low of 144.2p hit on 16 July. This shows how intensely febrile markets are at present.

But in recent days the market has been sensing that, grim though the background is, RBS may have been over-sold by hedge funds and that its underlying business model could be holding up.

The problem is that RBS is up against a problem bigger than Sir Fred's ambition, and bigger than the banking sector has had to face for 30 years: the capital-guzzling alien monster of the global credit crunch. So far it has eaten its way through $476bn (£243bn) of global bank capital through write-downs related to the US subprime debacle.

Note the words "so far". Estimates of the total write-down once the crunch has run its course range up to $1.1 trillion.

That toxic mortgage lending came to affect all the instruments into which it was sliced and diced – asset- backed securities, collaterised debt obligations and monoline insurers.

Earlier this year, the widespread hope was that the UK banks were being over-cautious and that some of the write-downs against US subprime and related debt might in time be written back.

The big worry now, as US house prices have kept sliding and mortgage debt arrears and defaults have spread to prime quality borrowers, is whether it is enough.

Another worry point is that the £5.9bn figure does not include impairment losses on the bank's UK business and residential mortgage book.