 |
| The initials RBS now stand for Right Bloody Shambles... I can’t believe Hester’s heart is still in the job |
There are some macro events in the next few years that will influence how the British economy goes and how British banking shares perform. The two most important for me are the fate of the Conservative-led coalition government at the May 2015 elections and whether or not the UK remains in the European Union. If the Conservatives stay in power and the UK stays in the EU, things should be fine. If either of these things does not happen, I would expect British banking shares to suffer. The UK chancellor of the exchequer, George Osborne, might well experience a warm glow when he contemplates his investment in Lloyds Banking Group, but I have no doubt he scowls as he ponders the quagmire that RBS represents. The UK taxpayer has an 80% stake in RBS and there is no clear exit strategy in sight. Indeed, since the chief executive, Stephen Hester, was unceremoniously elbowed aside last month, the bank has resembled a rudderless wreck, listing from side to side.