Free Finance Essay: Royal Bank of Scotland Crisis

1.INTRODUCTION The scarcity for banks and financial institutions to beseem balance their typical affaires of accepting deposits and providing mortgages, into global giants that are sundry and frequently-again-and-again agree in monstrous practices has been embedded as the undefiled creation of excellentism and traffic liberalisation. In the most late decade, most global economies and constructions enjoyed rare beseemth on the end of traffic liberalisation and increasing financial services sophistication. The scarcity for these constructions to beseem led to lax practices such as intrepid mortgages, haughty premiumes and rash cannonades, coincidently delay haughty leveraged practices, all of which enjoy been recognised as the important argues why these institutions were immensely defensecabandon to the financial opening. Banks were the most monstrous, principally accordingly they were one of the important starters. They agreed in intrepid lending to affaires and people, endowed in securities ended by subprime proceeds, and liberal affect they prepared to follow balance the globe – in-great-measure delay leveraged funding and customer deposits. If they had not endowed so rigorously in these intrepid securities, a immense enumerate of those banks that were bankrupted or scarcityed empire bailout would enjoy quiet been established. They had to transcribe down immense consumer and affair mortgages that were defaulted, and as-courteous transcribe down on the appreciate of collateralized something-due obligations they had in their portfolio. This led to immense detrimentes, and depletion of excellent reserves that prompted the agency of the empire in a immense enumerate of global banking affaires. This essay accordingly present to analyse the possessions of the economic opening on RBS Group, perpetrator community of Royal Bank of Scotland, and NatWest. The class’s financial, bountiful and cannonade activities would be analysed in this examine, delay the aim of establishing the argues why they bare the way they did compared to other UK banks, what could enjoy been performed ameliorate to mitigate such stolid detrimentes, and what they could do now to reward empire divideholding, and reupshot customer and endowor trust. A endground of the bank’s operations and cannonade activities would be outlined in the succeedingcited stipulation, followed by an separation of what went injustice, its goods, steps that enjoy been follown to mitigate such possessions. Then finally an separation of the bank’s floating avow compared to its rivals, and the possessions of macroeconomic and industrial occurrenceors on its floating and forthherebehind operations. 2.BACKGROUND – ROYAL BANK OF SCOTLAND The Royal Bank of Scotland class is a British banking and prophylactic pursuit community disingenuousd in Scotland, and bountiful in Europe, North America and Asia-Pacific. Its ocean subsidiaries embrace the Royal Bank of Scotland, NatWest, Ulster Bank In Ireland, Citizens bank in the US, RBS Coutts, Churchill Insurance, Direct Line and Privilege (RBS, 2009). RBS floatingly caters banking, individual banking, prophylactic and urbane finance solutions to balance 40 favorite customers globewide (25 favorite in the UK) and 1 favorite trivial affaires. In stipulations of Class traffic divide, RBS Class is floatingly the bar liberalst caterr of floating accounts to customers in the UK (Mintel, 2009). Foregoing to the 2008 sub-prime advance financial opening, RBS was the globe’s liberalst community by proceeds, fifth liberalst in the globe by traffic excellentisation and 10th liberalst community in the globe (Financial Times, 2009). RBS was established in 1727, and now has 2,278 branches and 118 affair centres in the UK unmatched (RBS, 2009). RBS’ enrichment and PBT has beseemn acceptably, up until 2007 where it chronicled a annals turnbalance and PBT of ?32.3 billion and ?9.9 billion respectively. However, succeedingcited transcribe-downs on late merits and detrimentes suffered during financing activities, RBS posted the principal constantly detriment by a British community of ?34.5 billion avail succeeding tax in 2008 (RBS Financials, 2009). 3.ANALYSIS OF RECENT ACTIVITIES RBS Class has beseemn balance the years through a sequence of merit and disquisition across distinct traffic places in the UK, US, Europe and Asia Pacific. The construction liberal into new traffics and acceptiond traffic divide through constitutional beseemth and merit. Its important US merits were in 1998 and 2004 when the bank assumed Citizens Financial Class and Charter One Bank respectively (RBS, 2009). The bank as-courteous assumed NatWest on 11th of February 2000, when it was visible the winner of the inauspicious follow balance action of the bank contrary Bank of Scotland. RBS as-courteous assumed a 10% sfollow in the Bank of China for ?1.7 billion in August 2005, in command to foster its interpolitical disquisition into Asia-Pacific traffics (Gumbel, 2009). These merit activities in no way remaindered in any lack on the bank, but they courteous-balanced catapulted it into one of the biggest companies in the globe. They made RBS a important player in the US and Asia vend and urbane banking assiduity, and as-courteous enabled it to leverage end service operations across the aggregate class. RBS had fortified financials (Illustrated in metaphor 1). The metaphors demonstration that up until 2007, its aggregate proceeds, enrichment and bountiful avail had been increasing acceptably oceanly as a remainder of these beseemth activities. These metaphors exemplify that the community was very fortified and thereby nconstantly obligatory a financial desuetude or a followbalance by the UK empire. Then what went injustice? Similar to any other UK or Interpolitical bank, RBS suffered imbecility jaw contrary bad mortgages made out to bankrupt companies such as the American conglomerate LyondellBasretail (?1.5 billion), and as-courteous encircling ?1 billion tied down in proceeds in Icelandic banks and Lehman Brothers (RBS, 2009). According to the Financial Times (2009) the bank as-courteous made detrimentes through its global banking and traffics non-location that was obligatory for endowing in Bernard Madoff’s Ponzi machination, US subprime traffic and as-courteous in Lehman brothers. These detrimentes remaindered in immense excellent bluntfalls delayin the bank and imbecility jaw of ?8,072 billion, but are quiet fashiontalented amongst other UK banks affect Barclays and HSBC that made conditions of ?5,419 billion and ?24,937 billion respectively delayin that corresponding year, but quiet made steady avails and compensated dividends to divideholders (Reuters, 2010). A jumpcabandon importantity of RBS’ lacks, immense detriment and scarcity during the security opening can be attributed to its merit of ABN Amro. It is widely priced that RBS immensely balancecompensated for ABN Amro and did not get the ameliorate of the dispense (Ram, 2007). In October 2007, RBS led a consortium delay Belgian bank Fortis and Spanish bank Banco Santander to get the Dutch bank ABN Amro for ?49 billion succeeding a failed bid from Barclays Plc. RBS clpresent its divide of the ABN Amro merit was ?10 billion, which was compensated for in-great-measure delay currency (Kennedy, 2009). The consortium that was made up of RBS, Santander and Fortis, bent up and dissected delay unanalogous non-locations of the bank. While Santander made forth delay ABN’s Brazilian affair Banco Real, and its Italian affair Anton Veneta; RBS made do delay the bank’s aggregatesale and Cannonade banking non-location, which already had a immense enumerate of intrepid proceeds and was most defensecabandon to the subprime advance traffics (Ram, 2007). RBS (2009) claimed that the merit would enjoy boosted the bank into one of the awful banking entities in the globe if it assumed the honest asset classes and performed its due attention. However, Griffiths (2009) priced that its subjoined scarcity was as a remainder of the charybdis of ABN Amro to subprime advances, and the occurrence that the bank in itself balancecompensated and accordingly strictly depleted its excellent disingenuous. However, we price that the bank’s involved humanization of beseemth through merit is what prompted the merit gayety, and courteous-balanced if the presicavity – Fred Goodwin – had been forewarned encircling the global opening, he may enjoy quiet past afore of the dispense. The bank’s readiness to beseem the globe’s liberalst bank, has accordingly catapulted it into one of the globe’s principal bank scarcitys. 4.WHAT HAPPENED? RBS’ fortune and the possessions of the security opening on its operations did not truly materialise when it began venturing on a dispose of excellent mound and unveiling activities. The community floated a ?12 billion 11-for-18 honests upshot, the liberalst constantly in the truth of Banking; sold Angels Trains, its retinue leasing conducive for ?3.6 billion and a 50% sfollow in Tesco Personal Finance for ?950 favorite. All these activities were in command for the bank to bench up its excellent reserves succeedingcited the merit of ABN Amro (The Times, 2009; Duncan 2008). Hurdle (2010) avowd that distinct endowors where jade of the degree to which the bank was defensecabandon to security impression downs and intrepid proceeds, howconstantly past the financial remainders were not yet out and endowors had no argue to be disturbed encircling the avow of the bank’s financials, the honests upshot was abundantly subscribed. Howconstantly on the 13th of October 2008, HM Treasury announced cunnings to inject an moderate ?20 billion of new excellent into RBS. In reappear, the Treasury would enjoy a say in how the community is run, cut premiumes handed out to bankers, save customer deposits and as-courteous aid save these banks’ toxic proceeds (Gumbel, 2009). RBS then prepared to foster a bars honest upshot of ?20 billion from endowors, which was escapened as endowors solely took up 0.24% of the divides life offered as they were life offered at 65.5p per divide and the divides were already trading on the pedestal at 52.7 per divide (Duncan, 2008). Shareholders were as-courteous haughtyly disturbed encircling the germinative nationalisation or tenure of the bank by the empire, which would enjoy availed the customers, but not the endowors and not courteous-balanced the taxpayers (Gumbel, 2009). This remaindered in empire insertion up the ?15billion that they subordinateneathwrote for the upshot, succeeding moderately endowing ?20 billion of taxpayer funds in the bank. On the 28th November 2008, RBS was 58% owned by the empire succeeding the ineffectual honests upshot. The occurrence that the empire now owned 58% of the bank led to endowor ire in-reference-to the bank, as they feared that the empire would interfere in the bank’s operations and accordingly bar affair as usual. However, these feelings where trifle compared to the hues assertion on the 19th of January 2009 in which RBS rely-oned to see transcribe downs of ?20 billion succeedingcited the lapse of ABN Amro and bountiful detrimentes of balance ?8 billion bountiful detriment due to its charybdis to the sub-prime traffic in the US. Shares bare 68.8% to 11p (Dunkley and Griffiths, 2009). The transcribe downs associated delay its merits were due to the occurrence that the bank trueised it balancecompensated during the merits and the proceeds that had been compensated for could nconstantly be sold for those prices, accordingly confirming Ram’ (2007) allegations. Aftercited the accumulation freefall and immense endowor ire, the empire agreed to acception sfollow in RBS to 70% by converting ?5 billion in gratification divides into typical divides thereby goodsively persuasive the community and eliminating the obligatory dividend liquidations of ?500 favorite unobservant of whether the community made coin or not. Figure 2: RBS’s accumulation traffic prices from 30/01/07 – 28/01/10. Source: Reuters (2010). Most other banks, as examiscarcity antececavity as-courteous suffered imbecility jaw delay compliments to security and charybdis to subprime advances, howconstantly they did not necessarily scarcity empire bailout, delay the qualification of Lloyds TSB that was encouraged to get HBOS. According to an stipulation on BBC News (2009), the merit of ABN Amro was treasured as “worst and most ill-time followbalance in truth”. By the 20th of January 2009, a day succeeding its hues assertion, RBS’ appreciate dropped to ?4.5 billion from ?75 billion two years antececavity (Times online, 2009). It was now estimate aggravate than half the currency it compensated in the dispense to buy ABN Amro. RBS’ floating traffic appreciate is betwixt ?18 –?20 billion (Reuters, 2010) 5.STEPS TAKEN TO ALLEVIATE The possessions of the financial opening, specially on vend and negotiatetalented banks, truly hampered consumer trust. It was now the allegiance of the UK empire to end up delay machinations and cunnings in command to aid cushion and bailout the banks, in command to bar an balanceall body ire of the banking assiduity. The Asset Protection Machination was accordingly introduced in February 2008, which RBS committed to by signing up ?325 billion of toxic proceeds (RBS, 2009). The occurrence that the bank had that abundant toxic proceeds (5.5x its aggregate divideholder equity and 13% of aggregate proceeds), performs one phenomenon encircling the goodsiveness of financial mastery in saveing the banks’ customers. If there was liberal mastery that scant the sum of toxic proceeds that each bank could endow in, a abundant closeer percentage of toxicity could enjoy been saveed, thereby significantly imposing the UK Taxpayers (Sbehind and Ferreira-Marques, 2010). Howconstantly Duke (2010) asserts that though these banks did agree in intrepid cannonade practices, the roll of toxicity of these proceeds were not truly unconcealed due to the sophistication of the financial regularity and collateralized something-due securities. The machination howconstantly aided to save RBS’ proceeds contrary detriment of forthherebehind appreciate. Signing up to the machination goodsively acceptiond empire dividepursuit to 84% of the bank, goodsively dissect nationalising the bank, and leaving divideholders delay solely 16% divides in the community. The construction now having learnt its precept (underneath the thoroughgoinggoing supervision from the UK empire) has now opted to disruanate a dispose of proceeds such as its 4.26% sfollow in Bank of China ($1.6bn), and encircling one fifth of its affaires, in a bid to localize on its nucleus traffics (Murden, 2010). Late developments embrace the 3Q 2009 detriment of ?2.2 billion by RBS, specially attributed to its sale of non-nucleus proceeds; late cunnings to disruanate forthherebehind from the Asset Protection Machination and as-courteous cunnings to retail off its Prophylactic proceeds, stock trading affair (RBS Sempra), encircling 318 bank branches (Guardian, 2009) and a ?1 billion hypothecate to UK manufacturing companies (RBS, 2009). The succeedingcited stipulation would examine the floating possessions of macro economic and industrial occurrenceors on the affairs delayin RBS. 6.MARKET AND INDUSTRY ANALYSIS Following RBS’ annals detriment delusionneath decisive summer, the empire sfollow delayin the organisations has acceptably revived from 57% succeedingcited a failed honests upshot, to 70% succeedingcited divide change, and now 84% succeedingcited its resolution to adadconnect the Asset Protection Scheme, thereby goodsively dissect nationalising one of the globe’s liberalst banks. Shareholder equity has been deteriorateed to as low as 16%, and the empire now enjoy aggregate curb on the activities delayin the organisation. That is a strict puff for an organisation whose ocean aim was to rescue avails and dividends to its divideholders, now it is managed affect a success bank, retailing off interpolitical proceeds, life cabandon competitive and concentrating on its nucleus traffic, in which the banking assiduity is already consummate (Duke, 2010). For all banks in public, and courteous-balanced in developing countries, their affairs and forthherebehind specially in the economic atmosphere, is air-tight tied to empire masterys. A befitting exemplification would be when Presicavity Obama announced cunnings to model up banks, bar them from owning hedge funds, individual equity and proprietary trading desks. The divides of most banks that were agreed in these activities agreed in a freefall including that of RBS, which owns a adarticulation luck RBS Sempra. The goods of this assertion would enjoy meant that banks would enjoy to model out their cannonade banking non-locations, which already accounts for a jumpcabandon importantity of avails in these organisations (Murden, 2010). The US President’s assertion is the smallest of RBS’ problems. It is subordinateneathneath warm regulatory exigency twain from the EU and UK, to model out its subsidiaries and perform it abundant aggravate slimmer and cabandon competitive. It is said to be a price for the bank due to its intrepid practices that obligatory empire bailout. However, a resolution for a bank to retail strategic affair parts and bank branches does not end affectly. It would strictly application on turnbalance and avails, class divided services, and its traffic divide in those nucleus traffics. RBS is life asked to retail RBS Sempra, a JV that made a avail of a avail of balance $600m in 2008 (Murden, 2010). It is as-courteous life required to retail its Asian affair, its Prophylactic affair and up to 318 bank branches, in a bid to bench up its excellent and reward the UK taxpayers. These affaires are flourishing and were the nucleus of RBS’ nucleus management of commencement and disquisition. The sales of these proceeds would strictly deteriorate the bank’s proceeds, customer disingenuous and traffic divide, and It may not be talented to cope goodsively in other traffics adissect from its unwritten Vend and Urbane banking (Gumbel, 2009) Also, delay floating national denunciation respecting its premium payout, there is jump to be aggravate vexation for the organisation delay compliments to recruiting and cherishing haughty performing staff. For persuasion, the national is disturbed that the bank wants to pay out encircling ?1.5 billion in premiumes, suming to an middle of ?85,000 per staff, when competitors such as Barclays and JP Morgan paying aggravate to their staffs (Patrick, 2010). Well-balanced if the bank were empire owned, curbing and paying out minimal premiumes honest affect this would press staff abroute to competitors that are talented to pay competitive packages and are not empire curbled. According to Johnson (2009), the bank has already lost encircling 1,000 staff to competitors such as Barclays decisive year, and could abandon courteous-balanced aggravate staff if the row delay the empire balance premiumes lives. The organisation is as-courteous said to be denial an increasing denunciation of security impressiondowns, specially in its mortgages granted to Four Seasons, and as-courteous in Dubai’s true eavow opening (Sbehind and Ferrerira-Marques, 2010). These mortgage transcribe downs cogitate on the practices that the bank had regularly agreed in, and calls for stricter occasion measures that determines the bank faces closeer denunciation of transcribe downs in the forthcoming. Adissect from these measures and possessions, the bank is as-courteous confrontment a customer opening, in the way in which customer distinguish the bank. If the bank lives to agree in security impressiondowns and retailing off its proceeds, customers may avoid for aggravate sttalented organisations that do not necessarily enjoy that abundant empire balancesight. The corresponding could be said for its employees and endowors as courteous, delay the empire persuasive all resolutions. There are as-courteous some allowtalented upshots imposing the organisation, as some of its divideholders are suing the bank balance its honest upshot in 2008. They bespeak that they were not made abundantly informed of the occasions associated in the ABN merit foregoing to their signing up for the divides. These endowors compensated 200p for RBS’ divides, solely for it to drastically abandon encircling 95% of its appreciate months behind when it announced its biggest annual detriment (BBC News, 2009). In stipulations of its assiduity separation, the community is at a strict helplessness when it ends to competitive counteragency. Due to its empire tenure and precariousness in-reference-to its forthcoming, the community is struggling to cope for customers, employees and endowors, contrary other awful fortified opponents affect Santander, Barclays and HSBC. The bank has to retail its Insurance, individual equity and balance 300 branches. These would strictly cavity endowor and employee conficavity and traffic divide in a enumerate of nucleus traffics. The bank as-courteous has to retail its office services affair. Based on metaphors in Ttalented 1 underneath, RBS quiet accounts for 18% of all floating accounts in the UK, delay the last traffic cap of encircling ?21 billion (18th January 2009). Thereby illustrating that it is quiet talented to cope goodsively in the UK traffic, but to what rollIf the empire keeps scrutinizing in its affairs? Floating Account Traffic Share Traffic Cap (? billion) Aggregate Proceeds (? billion) PAT (? favorite) Lloyds Banking Group 25% ?36 ?1,195 ?845 RBS Group 18% ?21 ?2,508 -?38,513 HSBC First Direct 14% ?122 ?1,736 ?6,498 Santander 14% N/A N/A N/A Barclays 13% ?36 ?2,320 ?5,287 Ttalented 1: Traffic divide of top UK banks. Source: Reuters (2010) The economic atmosphere, and the empire’s scarcity for new competitors enjoy strictly deteriorated the barriers to note into the banking regularity. It was lately announced that Blackstone Class and Virgin purposed to public banks in the UK (BBC News, 2009). And surmise whatThey cunning to do so by hiring off staff and buying off bank branches that are life sold by RBS. The traffic excellentisations of most banks are cabandon than 40% of what they were foregoing to the economic impressiondown. Well-balanced the ABN Amro that RBS bought for a liberal sum would not be estimate that corresponding fee now. Accordingly there is a immense opening for start-up banks or courteous-balanced interpolitical banks to end into the traffic and cope goodsively delay tangible players. The important suppliers to the assiduity now are invaritalented the empire who are providing prophylactic machinations and bailout funds to RBS. The empire has monstrous ability and has been talented to exertion it frequently-again-and-again in directing the actions of the organisation. Buyers, life bank customers as-courteous are jade, and the unreadiness of customers as a aggregate to adadconnect the bank can strictly deteriorate the bank’s ability to tempt deposits and accordingly perform aggravate coin by lending it to other people and affaires. However, the banking assiduity is sharp in any arrangement, and is scarcityed to cater security to affaires, accordingly there is no depute consequence. This media that the empire may live to rule the companies for as covet as necessarily, so as to acception liquidity in the arrangement and cater affaires delay bland mortgages. 7.FUTURE PROSPECTS Based on the recognizeledge gathered and analysed in this examine, it can be clear that RBS has a very bumpy route afore. It has 84% empire divideholding, and up until when it would be talented to foster ?17,640 favorite (84% of floating traffic cap – ?21bn), it would live to enjoy empire balancesight, and its operations, cannonade and financing activities would live to be strictly biased. Its floating fetid asset sales that’s its floating CEO – Stephen Hester is embarking on is aggravate affect a aggregate contrary from the fetid disquisition management of preceding presicavity – Fred Goodwin. As to whether RBS would reappear to availability in the direct forthcoming, we do not recognize. But the bank is quiet announcing security transcribe offs, so it doesn’t contemplate too optimistic anytime bluntly. Also, its management of winding down affaires, would strictly deteriorate enrichment and availability metaphor in the blunt run, but delay a competitive strain on its nucleus traffic, and a enumerate of nucleus brands, it could quiet cope goodsively and press beseemth bisectially in UK and EU. However, as forecasted by Norman (2009), that would not be for a few years to end. The bank is quiet going to experience vexation tempting and cherishing staff, and its customer disingenuous may not beseem as courteous as it used to. Howconstantly this is a bulky opening for the construction to sketch up a new unveiling management that would determine it gets rid of regulatory balancesight and reappears end to availability, divideholder rule and dividend liquidation in the direct forthcoming. 8.CONCLUSION RBS has shrunk in late years, from a awful hardness in global banking, to a dissect nationalised bank delay warm regulatory balancesight – that seems affect price – from twain the UK and EU regulators. The bank’s lacks occurred oceanly as a remainder of its merit of ABN Amro, and not necessarily due to security impressiondowns and subprime charybdiss. Its merit was been fuelled by a humanization of fetid beseemth and disquisition in strange traffics, which rescueed qualificational beseemth delayin those periods. With the show of the financial opening, and adjacent bank scarcity, came a 84% dividepursuit lifeline by the empire, and delay that came an warm regulatory balancesight that has strictly biased the bank’s asset disingenuous, and courteous-balanced promoted a de-establishment of some nucleus and nonnucleus affaires. These occurrenceors enjoy biased the bank’s competitive ability delay compliments to floating and prospective employees, divideholders and courteous-balanced customers, a helplessness that may follow some years to mitigate. It is accordingly recommended that the bank drafts an achievtalented rewardment cunning balance the herebehind years for it to be rid of empire dividepursuit and reappear itself to competitiveness – albeit delay a new precept learnt. 9.REFERENCES BBC NEWS (2009) RBS divides precipitate on recession, www.bbc.co.uk, (accessed29/10/2009) Duke, S. (2010) Exigency on Empire to slash RBS payouts succeeding global banking departure on premiumes, www.dailymail.co.uk, accessed: 26/01/10 Duncan, H. (2008) RBS chiefs rely-on 95% to follow up honests upshot’,www.thisislondon.co.uk. (accessed 30/10/2009) Financial TImes (2009) RBS et mon droit: HM deficits. ftalphaville,ft,com, (accessed 20/01/2009) Griffiths, K. (2009) RBS suffers biggest detriment in UK truth, www.telegraph.co.uk, accessed: 26/01/10 Gumbel, P. (2009) Saving Britain’s Broken Bank, Fortune, 00158259, Vol 159 (10) Howells, P. G., and Bain, K. (2005) The economics of coin, banking and finance: a European quotation, Pearson Education, 602pp Hurdle, J. (2010) Developer sues RBS part for $8 billion, www.reuters.com, accessed: 25/01/10 Johnson, A. (2009) RBS suffers disappearance in evoke of premium denunciations, The Express, www.allbusiness.com, accessed: 28/01/10 Kennedy, S. 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(accessed 30/10/2009) Reuters (2010) Financial Statements for RBS, Lloyds TSB, HSBC, and Barclays, www.uk.reuters.com, accessed: 25/01/10 RBS (2010) RBS/NatWest Launch $1bn Fund in Rule of UK Manufacturing Sector, www.rbs.com/media/news, accessed: 25/01/10 RBS (2009) What we do, www.rbs.com/about-rbs, (accessed 20/01/2009) RBS Financials (2009) Community Announcements, www.investors.rbs.com, accessed: 25/01/10 Slater, S., and Ferreira-Marques, C. (2010) Hester refocuses RBS as proceeds go on arrest, www.reuters.com, accessed: 27/01/10 The Times (2009) Royal Bank of Scotland: the bank that sank, www.timesonline.co.uk (accessed 29/10/2009) Times Online (2008) RBS divideholders escape ?15bn honests upshot, www.timesonline.co.uk. (accessed 31/10/2009) 10. APPENDIX 2005 2006 2007 2008 Revenue (?bn) ?25,569 ?28,002 ?31,115 ?31,413 Total Proceeds (?100 bn) ?7,768 ?8,714 ?19,005 ?24,017 PAT (?bn) ?5,558 ?6,497 ?7,712 -?34,542 RBS 2005 – 2008 Financials