Some of you will be fed up of hearing me issue RBS warnings, but equally, some of you may have spotted that there’ve been murmurings in government about the bank over the last few days. I find this muttering very disturbing. This from last Friday’s FT (my italics):

‘The UK government’s ownership of Royal Bank of Scotland is likely to be reinforced before it is reduced, the UK bank’s chairman Sir Philip Hampton has indicated, with an autumn-time capital restructuring being discussed with regulators. RBS is locked in three-way talks with the Financial Services Authority and the government, which owns 82 per cent of RBS, to decide a mutually acceptable way of restructuring‘.

Increased levels of taxpayer ownership, and that dread word ‘restructuring’, are not good signs. Also less than encouraging was this:

‘“The FSA just wants us to be appropriately capitalised,” Sir Philip said. “The target for substantial completion of their thinking is end-June. So the extent to which the Treasury is involved, they can think about this over the summer recess.”’

It is odd, is it not, that the Mandarins of Whitehall think the World will wait until their break in Tuscany, or Surrey, or somehere else ending in ‘y’, is over before going mental. The urgent truth is that Royal Bank of Scotland is a massive lossmaker – over £1.4bn in Q1 2012 alone –  and admits to being heavily exposed to the worsening Irish property disaster. The exposure that dare not speak its name, of course, is that to Russian mendacity.

I worry when articles like these contain so much jargon clearly designed to obfuscate the nature of what’s going on. Talk of contingent convertibles, coco instruments, asset protection schemes and all the rest of the gibberish will equal considerably less than a hill of beans when the bad stuff hits.

Meanwhile, I am warned by a regular Slogger as follows:

‘Last week amid all the Olympic Torch and Jubilee celebrations, RBS announced a shares consolidation. The gist of it was that your holdings were reduced by a factor of 10, and so the share price went up correspondingly.  So if you had 50 shares at 20p, you now have 5 shares at 200p…..Just waiting for the next few months to see the government announcing the sale of it’s holding in RBS.  “Well we did pay 50 p per share when we bought it, but the shares are now worth 200p – which represents a handsome profit for the taxpayer”…’

This could be a very shrewd observation…and/or it could mean RBS reducing private shareholding percentages to make way for bigger (Whitehall) fish…all the while screwing the risk-taking shareholder.  Certainly, last November when UK Investments (the State’s holding the bomb company) tried to flog it to Abu Dhabi, the shareholding was worth just 23% of what it cost to bail out Freddie Badloss’s penis extension bankrupt bank.

Stay tuned. This is definitely one to watch.