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Scots banking giants suffer new lows



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Published Date: 16 July 2008
By Martin Flanagan
SHARES in Royal Bank of Scotland and HBOS fell to multi-year lows yesterday, as fears mounted about RBS's ability to sell its insurance division and HBOS was caught up in the woes from the mortgage market in the US.
RBS's shares fell 11 per cent before later recovering somewhat to close down 7 per cent at 167.3p.

The drop followed an 8 per cent fall on Friday after another potential buyer, Zurich Financial Services, had walked away on Thursday night from the £5-7 billion auction of the Royal's insurance division.

HBOS, whose £4bn rights issue closes this Friday, was said to be caught up in fears about the banking fallout in the US from the problems at mortgage agencies Fannie Mae and Freddie Mac.

HBOS's shares were off 7 per cent before later closing down 4 per cent at 260p – compared with a 275p-a-share rights issue price.

One City analyst said: "RBS is under the cosh because the sale of the insurance division does not seem to be progressing smoothly."

Analysts said there now also looked a risk that a significant rump of shares could be left with the underwriters in the HBOS share issue.







The full article contains 206 words and appears in The Scotsman newspaper.
Page 1 of 1

 
1

ebbi,

spain 16/07/2008 08:46:58
Thomas Jefferson's Warning To America :

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Written by Jefferson in a letter to the Secretary of the Treasury Albert Gallatin (1802).
2

Evan Owen,

Snowdonia 16/07/2008 09:21:07
Do the shares now look cheap in banking and insurance?
3

Evan Owen,

Snowdonia 16/07/2008 09:39:31
Just been looking at auction results, very interesting, is the housing market looking rosier? Better get in while you can then.
4

A Friend of Fernando Poo,

16/07/2008 13:49:02
These banks have all been the source of the problem with their ridiculously careless lending during the credit bubble. The cure is surely to get rid of them and replace them with banks which are rather more careful with our money.

Yet the very moment the markets provide the cure, via the credit crunch, which will reduce stupid lending and get rid of the perpetrators, suddenly our politicians want to throw all our tax money down the same rathole and keep the perpetrators of the bubble in business.

Anyone would think that they want the whole thing to happen again.
5

Between the lines,

Scotland 16/07/2008 14:22:51
Calling "ROSCOE P COLTRANE" : where are you today then you clueless pillock? Presumably your sniping at people on these forums who questioned the viability of HBOS when it's share price was at at lofty 280p has now been swallowed given that your beloved HBOS currently has a price of 236p???

PS ROSCOE - a note of advice : better to buy your HBOS "rights shares" on the open market directly, that way you'll save 40+p per share.
6

cathmb,

germany 17/07/2008 22:21:45
RBOS is the "house bank" of Continental Ag, the world's 5th largest supplier to the automotive industry. RBOS is behind the recent hostile takeover bid of Continental by the Schaeffler Group, being one of the banks helping this non-listed (and therefore not subject to various employment law and other regulations designed to protect individuals as well as communities)company. Why?
Does nobody read Adam Smith these days?
7

Socrates-1,

London 20/07/2008 22:22:52
So HBOS is holding $40 billion of US "asset backed" securities? And it has just invested £40 million in Tullock Homes? And more money in another Scottish property company? And £128 million in the Waterside Construction Project in Liverpool?

It has provided a debt facility of over £100m to a Unit Trust sponsored by Tritax Securities 1 Ltd. to finance a major construction at Quorum Business Park, Newcastle Upon Tyne. It has advanced £21million to Henry Homes plc for the purchase and mixed-use redevelopment of the Canon House office block in Wallington, Surrey. etc etc etc All of this activity in the last few months!

Bank of Scotland seems to be trying to outdo Northern Rock in heading for a brick wall at full speed, with the usual financial regulators fast asleep.


 

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