Five questions answered on RBS’s positive quarterly profit results

Investors react.

The bank that was famously bailed out in the 2008 financial crisis has posted its best quarterly profits for over a year. We answer five questions on RBS’s latest figures.

How much pre-tax profit has the bank made?

The bank has made a pre-tax profit of £826m, this is compared to a £1.5bn loss in the same period in 2012 and a £2.2bn loss in the final quarter of last year.

What has been the bank’s response to these positive results?

In a video statement on the bank’s website, Chairman Sir Philip Hampton said he expects the government to start selling shares in the bank from the middle of 2014, or possibly earlier, so the bank can return to privatisation.

He said any such sale would be "terrific for the country".

The government owns an 82 per cent stake in the bank after it bailed it out in 2008.

What else did Hampton say?

"Our balance sheet is substantially fixed... our operating profitability has come through quite strongly," he said.

"What we want to do is have a business that is performing well... enabling the government to start selling shares from, let's say, the middle of 2014 on - it could be earlier, that's a matter for the government - but certainly we think the recovery process will be substantially complete in about a year or so's time."

If the government sold its shares in the next year or so would they be getting a good deal?

It’s not known how much the government would sell its stake for, but currently, RBS shares are valued at 407 pence a share on the government's accounts. However, the government paid 502 pence a share during the bailout.

According to the BBC’s business editor, Robert Peston, this suggests the Chancellor, George Osborne, could opt to sell at the lower price and still claim to be getting fair value for the 82 per cent taxpayer stake.

This would result in a return to shareholders after the government invested billions in the bank five years ago.

How have investors reacted to the quarterly results?

Despite Hampton’s optimism, investors have reacted negatively, with RBS shares falling more than 4.5 per cent in the first 10 minutes of trading on the London Stock Exchange.

RBS. Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

Photo: André Spicer
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“It’s scary to do it again”: the five-year-old fined £150 for running a lemonade stand

Enforcement officers penalised a child selling home-made lemonade in the street. Her father tells the full story. 

It was a lively Saturday afternoon in east London’s Mile End. Groups of people streamed through residential streets on their way to a music festival in the local park; booming bass could be heard from the surrounding houses.

One five-year-old girl who lived in the area had an idea. She had been to her school’s summer fête recently and looked longingly at the stalls. She loved the idea of setting up her own stall, and today was a good day for it.

“She eventually came round to the idea of selling lemonade,” her father André Spicer tells me. So he and his daughter went to their local shop to buy some lemons. They mixed a few jugs of lemonade, the girl made a fetching A4 sign with some lemons drawn on it – 50p for a small cup, £1 for a large – and they carried a table from home to the end of their road. 

“People suddenly started coming up and buying stuff, pretty quickly, and they were very happy,” Spicer recalls. “People looked overjoyed at this cute little girl on the side of the road – community feel and all that sort of stuff.”

But the heart-warming scene was soon interrupted. After about half an hour of what Spicer describes as “brisk” trade – his daughter’s recipe secret was some mint and a little bit of cucumber, for a “bit of a British touch” – four enforcement officers came striding up to the stand.

Three were in uniform, and one was in plain clothes. One uniformed officer turned the camera on his vest on, and began reciting a legal script at the weeping five-year-old.

“You’re trading without a licence, pursuant to x, y, z act and blah dah dah dah, really going through a script,” Spicer tells me, saying they showed no compassion for his daughter. “This is my job, I’m doing it and that’s it, basically.”

The girl burst into tears the moment they arrived.

“Officials have some degree of intimidation. I’m a grown adult, so I wasn’t super intimidated, but I was a bit shocked,” says Spicer. “But my daughter was intimidated. She started crying straight away.”

As they continued to recite their legalese, her father picked her up to try to comfort her – but that didn’t stop the officers giving her stall a £150 fine and handing them a penalty notice. “TRADING WITHOUT LICENCE,” it screamed.


Picture: André Spicer

“She was crying and repeating, ‘I’ve done a bad thing’,” says Spicer. “As we walked home, I had to try and convince her that it wasn’t her, it wasn’t her fault. It wasn’t her who had done something bad.”

She cried all the way home, and it wasn’t until she watched her favourite film, Brave, that she calmed down. It was then that Spicer suggested next time they would “do it all correctly”, get a permit, and set up another stand.

“No, I don’t want to, it’s a bit scary to do it again,” she replied. Her father hopes that “she’ll be able to get over it”, and that her enterprising spirit will return.

The Council has since apologised and cancelled the fine, and called on its officials to “show common sense and to use their powers sensibly”.

But Spicer felt “there’s a bigger principle here”, and wrote a piece for the Telegraph arguing that children in modern Britain are too restricted.

He would “absolutely” encourage his daughter to set up another stall, and “I’d encourage other people to go and do it as well. It’s a great way to spend a bit of time with the kids in the holidays, and they might learn something.”

A fitting reminder of the great life lesson: when life gives you a fixed penalty notice, make lemonade.

Anoosh Chakelian is senior writer at the New Statesman.