Tuesday, April 27, 2010

£10bn profit for taxpayers after shares in bailed out banks surge.

And here's some news which we won't hear the Tories talking about.

The taxpayer is sitting on a profit of close to £10bn on its stakes in Royal Bank of Scotland and Lloyds Banking Group after a surprise surge in their share prices.

The shares in both banks have risen sharply in recent days and outperformed the wider market amid signs that the banking crisis is coming to an end and that their bad debts have peaked.

Alistair Darling tonight claimed his bailout of the banking sector had been justified after analysis by the Guardian showed a sizeable paper profit had opened up – once recently disclosed fees paid to the government are taken into account.

RBS shares have jumped 75% in little more than two months and a £26bn combined loss on both stakes at the end of last year has now been reversed to a profit of £9.4bn. The Guardian has calculated that the profit on the 84% stake in RBS tonight stood at £7.4bn while the taxpayer's 41% share in Lloyds was worth almost £2bn more than the Treasury paid for it.

Whenever the Tories talk about the bailout they always sound as if we will never get that money back. When, of course, we will. We will one day sell our shares in these institutions and will most likely do so for a profit.

But that script doesn't fit in with the Tory storyline. Indeed, they were against even stepping in at all when Northern Rock looked like going under.
"I am not in favour of nationalisation, full stop," he [Osborne] announced in the Commons. Instead his decision is to allow the bank to collapse.
And yet we are still in a position where George Osborne could be our next Chancellor of the Exchequer.
Darling said: "My judgment was right ... I've always said we would get our money back and more".
It's no wonder the Tories are hiding Osborne away for most of this election. The man has been wrong in every single call that he has made.

Click here for full article.

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