The Royal Bank of Scotland Lost Great Gobs of Money

The Royal Bank of Scotland makes the Guinness Book of Records

Royal Bank of Scotland

Remember all those jokes we used to hear and tell about the Scots and the way they thought about money? It seems we were way off course. The Royal Bank of Scotland has just earned the dubious honor of posting the largest annual loss in British corporate history - a $34.2 billion black hole fed by the bank's aggressive acquisition spree of recent years.

According to our jokes, the Scots guys were supposed to be so tight with money that it was impossible to pry it loose from them. We should have tried the Royal Bank of Scotland; they didn't believe the jokes either!

Restructure

A new management team is in place in the bank and has unveiled a drastic restructuring program which includes dumping hundreds of billions of dollars of toxic assets into a government insurance program.

A Scottish pension?

Meantime anger erupted over a $23 million pension pot bestowed on its disgraced former chief executive, Fred Goodwin. It was Goodwin who engineered the expensive takeover of Dutch bank ABN Amro in December 2007 when its investment banking business was heavily exposed to the complex financial instruments hit by the crisis. ABN Amro was responsible for 55 percent of the bank of Scotland's losses.

I’m sorry…

Goodwin, 50, and former chairman McKillop issued a public apology for their roles in the bank's downfall, but controversy continues to rage with revelations that Goodwin – who, in 2004, was knighted by Queen Elizabeth II for services to banking - is receiving a $992,000 a year pension. Sir Fred is widely seen as the architect of RBS’s disastrous strategy of corporate acquisitions, which led to its downfall. ... click here to read the rest of the article titled "The Royal Bank of Scotland Lost Great Gobs of Money"