Tom McKillop said of RBS’s purchase of ABN Amro in 2007:
It was a bad mistake, at the time it didn’t look like that.
This is odd, because slightly before that time - when Barclays was sniffing after ABN - I wrote this:
Barclays is onto a loser…the gains of the merger have already been reaped - by ABN Amro's shareholders.
I don’t say this to boast. What I know about banking mergers can be written on the back of postage stamp. In crayon. By a gorilla.
But I do know how to find evidence, and how to avoid egregious errors of reasoning.
It looks like banks’ bosses were incapable even of this. It’s enough to make me think Taleb might have been right after all.
But I do know how to find evidence, and how to avoid egregious errors of reasoning.
It looks like banks’ bosses were incapable even of this. It’s enough to make me think Taleb might have been right after all.
No one is too smart to deceive himself.
Posted by: ad | February 10, 2009 at 07:21 PM
The Barclay's deal looked 'hard to justify' as they say. Chris Dillow said it clearest; but he was not alone
The RBS deal was manifestly worse: a higher price, the good bits of ABN Amro handed to Santander, what looked like the second best to Fortis (even so they proved toxic) and the dicey remainder to RBS with no discount.
Posted by: D iversity | February 10, 2009 at 08:02 PM
Seems like it was a case of the RBS guys thinking the could be big time Charlies and create some kind of global institution like CITIBANK... and damn it, what a success that has been!
As far as I can remember RBS were only really after part of ABN relating to a real estate portfolio, but ended up having to buy the whole thing... thinking they could break it up and parcel out the bits they wanted... but then the credit crunch happened.
I hope the original RBS shareholders get diddly squat for their shares. They can only blame their board and executive directors for making a total arse of it and forcing the govt to rescue them.
Barclays must be laughing to themselves! a narrow escape! they could have ended up being nationalised.
Posted by: Glenn | February 10, 2009 at 08:15 PM
Well done, although this isn't really an example of merger gains being caught by the shareholders, instead it wasn't worth anywhere near the share price.
Posted by: Matthew | February 10, 2009 at 09:00 PM
The whole finacial fiasco seems to be based on either fraud or incompetence.
I wonder how far will the Brits go to get their pounds worth of justice.
Posted by: ash | February 10, 2009 at 11:51 PM
I suspect "wilful stupidity" would be closer to the truth.
Posted by: ad | February 11, 2009 at 08:22 PM
"I wonder how far will the Brits go to get their pounds worth of justice."
Would you like to step into the line and qeue please?
Posted by: BathUK | February 20, 2009 at 08:52 AM
And a lot of it reflects a switch from bank deposits to securities; foreigners “other investments” in the UK, http://www.watchgy.com/ mostly bank deposits, fell by £143.2bn in Q1. And of course there’s no guarantee such buying will continue.
http://www.watchgy.com/tag-heuer-c-24.html
http://www.watchgy.com/rolex-submariner-c-8.html
Posted by: rolex submariner | December 27, 2009 at 05:02 PM