Friday, August 30, 2013

Village of the Damned

Edinburgh is home to the Royal Bank of Scotland, the bank that owns Citizens Bank of Rhode Island (subsequently Royal Bank of the Americas) where I worked until I got the surgery on my shoulder and they dumped me faster than an old newspaper.  I couldn't afford to keep the house and all the cards fell down.

It's tempting to go to the home office to query them on just how they would make this situation right.  However, it's not likely they would do anything as the bank, like many others, is crooked to the core.  This is the same bank that almost single-handedly came close to bringing down the UK economy.

Fred Goodwin was running RBS at the time and this incompetent and amoral swine at one time had a knighthood from Queen Elizabeth.  Whether he still retains it after the revelations of what he did and the bank did on his behalf is unknown.  What is known is that the bastard lives in luxury to this day despite it all.

In England there is a 'super-injunction' which prevents news media from saying anything disparaging about anyone who has manifested the type of behaviour he has demonstrated.  I don't know if that applies to blogs but I do know this blog is published in America so that son of a bitch can blow me.

I can't speak of the financial wrongdoing of RBS as a whole as I wasn't aware of it and wasn't involved in it but I do know specifically about what happened in the acquisition of ABN AMRO, a Dutch bank that was sold off in parts around 2007.  Goodwin on behalf of RBS was competing with Bank of America for the retail division of the bank but he lost.  Rather than blowing it off and moving along, he continued competing for a transaction processing division of ABN AMRO which was neither significantly profitable nor compatible with the growth model defined for Citizens Bank / RBS Americas.  With this component he was successful but this was only an example of losing by winning.

The transaction processing division is not a high-profit unit even though it passed hundreds of billions of dollars daily in international transfers.  The division did not get a piece of the action but got what was, in effect, a click charge much like the toll that is paid for crossing a bridge.  The problem with this was that Citizens Bank was tasked with doing it and significant hardware and staff expansion was needed to accommodate it.  When it's known the division doesn't make all that much money, to pump bank capital into supporting it is patent absurdity.

The consequence of this stupidity was the growth model for Citizens Bank was frozen.  Up until that time the bank had been very successful with a relatively simple model:  Acquire, Absorb, Recover, Repeat.  It would buy other banks and assimilate them into the Citizens Bank system thus growing its reach, number of accounts, profits, etc.  The bank grew to be the fourth largest bank in the United States this way and this model is what Fred Goodwin shot all to hell as there was no way to continue with any profitable acquisition while hardware and staff were dedicated to stabilising the ABN AMRO unit.

So, what say I present at the RBS HR office and ask them about the weather, huh?

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