Chillin' out till it needs to be funded
Mis-sold prepayment insurance account for 16 million UK policies and accordingly where around 3 million such policies are likely to be proved as mis-sold, just Lloyds and RBS have provisiones $6.5 bln for the pre payment fracas, writing down whatever hopes government had of retrieving their capital from them. Barclays similarly stands bruised by $1.6 bln as mentioned in the summary of the bank results when HSBC came out with results yesterday.
RBS had earlier reported a yoy increase of 25% to $3.36 billion in Net Income (from its core business) which converted into a pretax loss of less than $200 mln after the above PPI charges on its APS for mortgage holders RBS Insurance was requested to be sold by the Competition guys but did report a $100 mln profit Total Income at BNP was down 7% to $7.6 bln
BNP also reported bigger profits on a revenue tab of $16 bln translating to a Net Income of $3.72 billion just for the quarter claiming a reduction of 30% in provisions
BNP has upped its Tier I common ratio to above 9% and Benelux (Belgium, Netherlands and Luxembourg) deposits and loans have increased giving it some solace from sovereign risk that it was earlier carrying. It also proudly claimed to have grown its corporate debt business profits by 15% even as global banks reported losses of revenue of above 15% and profits of almost 25%
RBS which is 83% govt owned has shares trading below its 51 cent price at which treasury bought its shares in 2008 BNP Cost income Ratios stayed below 60% at 57.6% from the looks of it though Corp Debt may be unlikely to be an area of strength fro this European player, it seems to have lost all causes of depletion of NAV and earning capacity while the same is still keeping RBS down with its other Queens subjects like Lloyds losing a lot of assets and unlikely to return govt shareholding at a profit or even at a depleted price in the next 2-3 years
Both RBS and BNP are unlikely to report significant international portfolios unlike Banco Santander and HSBC from the same domiciles to say