The announcement from RBS concludes a busy week in which the bank received a further £33.5bn cash injection from the government, taking the total spent on bailing it out so far to £53.5bn. That makes it the most expensive bank rescue anywhere in the world to date. Sir Fred Goodwin must be very proud. Since RBS is now owned 84% by the state, perhaps it should be renamed the Royal Bank of Britain?
The loss is in stark contrast to Q3 2008, when the bank posted a £2.3bn profit. But then quite a lot of water (not to mention plenty of red ink) has passed under the bridge since then. Bad debts for the first nine months of the year so far stand at £10.8bn, up from £2.8bn last year, and chief exec Stephen Hester expects write-offs to continue at the same level next year and doesn’t expect to return to profit until 2011.
As if that wasn’t a gloomy enough way to start the weekend, the ONS reckons that the cost of the financial crisis could add as much as £1.5trn to the national debt. That’s so much money our heads start hurting if we even try to think about it.
From national to personal finance, and the news is still grim. The latest Insolvency Service figures show that a record 35,242 individuals in England and Wales were declared insolvent in the three months to the end of September, including no less a personality than Jo Swash (winner of I’m a Celebrity get me Out of Here, in case you were wondering). That’s the highest number since records began in 1960.
Experts are blaming a combination of rising unemployment and credit card debt hangovers from the boom years for the rise, and expect the total number of personal insolvencies to hit 130,000 for the year. At least business insolvencies are down slightly - 4.7% lower than for Q2, but still 14.6% up on Q3 last year.
All this doom and disaster will come as no surprise to those who say that we are in the middle of a double-dip recession, and that the fragile optimism of the summer may have been more down to the light evenings and sunny weather than to any real sign of economic recovery. Only time will tell who is right.
However, despite the parlous state of both our national and personal finances, there is one small chink of light in the darkness. The postal strikes have been called off – for now at least – so Christmas cards and pressies may make it their recipients on time (ish) after all.
Although if you’re one of the thousands teetering on the verge of personal insolvency, this isn’t good news at all. For the last few weeks, the people you owe money to may actually have believed your claims that 'the cheque must be lost in the post’...
In today's bulletin:
Another 1,200 jobs to go at BA after worst-ever first-half
RBS losses balloon and more Brits than ever go bankrupt
Read our new blog: John Vincent's Life of Enterprise
Is Lord Alan Sugar out of touch with SMEs?
Editor's blog: Buffett betting on rail