Royal Bank of Scotland Continues Slide

The headline financial news on Thursday morning was the decision by the Bank of England's Monetary Policy Committee (MPC) not to extend its programme of quantitative easing beyond the £200 billion already spent. The decision was widely expected, but with Santander, the largest bank in the euro zone, reportedly increasing its bad debt provision to €9.48 billion, it was hardly a fillip for British banks.

Dominic Turner
shareprices.com - Thursday, February 04, 2010

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Royal Bank of Scotland Group

Investors eyed the decision with caution and shortly after midday Royal Bank of Scotland, down 1.29p or 3.65% at 34.09p, was one of the worst performers in the banking sector. RBS' share price has been in steady decline in recent weeks with the latest fall contributing to a slip of just over 11% since the stock closed at 38.34p on 19th January.

RBS is now 84% owned by the British taxpayer after the Treasury's decision to lend the bank a further £25 billion of public money last November, but that decision is being challenged by environmental and human rights campaigners. Yesterday the World Development Movement (WDM) served the Treasury with an application to the High Court to this effect and was particularly critical of RBS' lending to Tullow Oil, whose contracts in Uganda for example, "cannot be regarded as being in accordance with the interests of the host country", it said.

Earlier in the week RBS sparked outrage amongst taxpayer groups when it was revealed that, despite the bank claiming that any bonuses to its staff would be paid in shares, those shares could actually be converted back into cash after just 3 months.

 

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