Analysis: Don’t believe things can only get better – they may yet get worse
STEPHEN Hester offered few excuses for another embarrassing set of results from Royal Bank of Scotland. But the chief executive’s insistence that underlying performance is improving won’t wash with those who can’t help wondering where the next shock might be coming from.
No-one can hide from a doubling of losses to £1.5 billion. Failures and penalties have piled up in what has been a dreadful first half of 2012. It is tempting to say things can only get better. But in view of the bank’s ability to find more problems hidden under the rocks, they might get worse.
From mis-selling of payment protection insurance and interest protection on business loans, to the IT meltdown and as yet undisclosed exposure to the interbank rate-rigging scandal, the scandals and operational failings have kept on coming. The numbers are truly numbing yet now so commonplace there is a risk of the public becoming desensitised to their scale and implications. Full nationalisation may have been played down, but ministers are becoming exasperated by the continuing flow of bad news and what to do about RBS.
Hester wants us to believe he is still on track to return the bank to profitability and allow the taxpayers to get their money back, and there is evidence that the core banking operations are performing more soundly.
Trouble is, those scandals and failures keep tripping him up. Eventually, he may just fall down.
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