Bank profits... state ownership... dividends etc..

[davido140]

Just having an idle wonder about stuff I dont fully understand...

Since large chunks of several major banks were snapped up by the state in recent times of trouble the banks have started to turn a rather healthy profit again (probably not what they once were, but 1.1billion in 6 months from RBS isnt too shoddy)

Do the government get a nice dividend? (if the bank is actually paying dividends at the moment) by my fag packet calculations, as one of 26 million tax payers in the UK about £3 and a bit of that is mine! (based on 84% state ownership)..

Of course all of that wouldnt go to dividends, the bank is going to retain some, or all of it to bolster their reserves.

But ultimately, if the state continues to own a large chunk of a profitable business I'm guessing they are due for a healthy windfall as and when the shares are sold on again, or the banks are broken up and shares sold, or they hang on to them and collect dividends.

if the banks continue to recover like this it might prove to be something of a shrewd investment, no?

[davido140]

williamp said:

Of course, as they are 84% owned by the british public, should they make a profit in the first palce? Are their interest rates too high if they can make a profit?

That profit does, afterall come from the british public... who own it.

From a treasury point of view it's a bit like a particularly stealthy tax I guess. We already have state owned savings and invesments which are pretty st at the best of times.

[davido140]

Marf said:

Hell, if RBS' share price returns to early 2007 levels we'd be able to pay off the defecit in fell swoop.

Problem is they couldnt possibly sell 84% of the company at that price, the shares would nosedive in value wouldnt they?

Would have to be sold off in bits over a number of years??