SO is it the firing squad for RBS chief executive Sir Fred Goodwin on the basis of the biggest loss ever reported by the bank? Bizarrely, perhaps, not yet awhile.
* Bill Jamieson, The Scotsman's Executive Editor, was online this morning to discuss today's RBS announcement. Scroll to the bottom of the page to read the discussion *For while RBS has slumped into a pre-tax loss of £691 million
in the six months to end June after sub prime debt provisions of a whopping £5.9 billion, these results are better than widely feared.
The stock market had been braced for an overall loss of up to £1.75 billion, the worst in the UK banking history. The actual result was much less than this.
So while the overall market opened lower this morning, shares in RBS managed a gain of 9.25p or 2.25p to 238.25p.
Sir Fred described the "unprecedented" market conditions as "a chastening experience and reporting a pre-tax loss of £691 million is something I and my colleagues regret very much."
That big slice of humble pie will not assuage all the critics who have questioned his buccaneering acquisition ways and the bank's big errors of judgement in America where it suffered from its exposure to US sub prime and derivative products.
But credit where credit is due. Pro forma profits, leaving aside the pre-announced sub prime write downs, came to £5.1 billion, down just three per cent.
UK retail and corporate banking profits are up 8 per cent .
"Impairment losses" on UK retail banking - that's provisions against mortgage and personal lending to non-business customers are down eight per cent at £556 million.
And the integration of ABN AMRO is yielding savings twice the level the bank anticipated at this stage.
So underlying business results, bearing in mind the atrocious conditions of the past six months, are better than many expected.
So are Sir Fred and his chairman Sir Tom McKillop off the hook? I do not see a clamour among institutional investors for change on the basis of these results.
But the big test is still to come. Economies around the world are now slowing. US, continental Europe and the UK will almost certainly experience recession. That means a near certain rise in bad and doubtful debt provisions.
Sir Fred Goodwin warns in his statement that difficult conditions in financial markets "look set to be compounded by a deteriorating economic outlook".
This is not the beginning of the end - just the end of the beginning of the banking drama.
The full article contains 436 words and appears in The Scotsman newspaper.
