Page 212 - Bank Case Studies

Royal Bank of Scotland

Global Restructuring Group

The Royal Bank of Scotland (RBS) is

a world leading financial

institution.

When the credit crunch hit in

2007/8, RBS was riddled with risky
investments that imploded. By

2008 its balance sheet was bigger than the entire UK GDP at

£2.2 trillion. Thus, when the mortgage market collapsed, the

bank was unable to handle the amount of people defaulting

on their loans or the value of assets becoming worthless.

Consequently, over 2008/2009 as RBS’ share price collapsed
the British government paid £45.4 billion to bail it out,

ending up with an 81% ownership stake.

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