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Less than a fortnight after ADVFN reported that the Bank of England had publicly stated that the Royal Bank of Scotland (LSE:RBS) needs to raise £3.2 billion, the Church of England is reportedly heading a consortium that is about to drop some loose change into the offering plate.
Most of the reports so far are more or less speculation as to the details of a structured deal that could end up with the Church owning a significant stake in the 316 branches that the Bank is attempting to dispose of in order to raise much needed cash. Other members of the consortium include former Trade Minister Lord Davies’ Corsair Capital, RIT Capital, Centerbridge, and Standard Life. Although it’s not known how much the Church is ready to contribute, a tithe of its investment portfolio of £5.5 billion would be £550 million. Although that’s not likely to be the amount, I mention it to remind you that the Church can afford to put more than a pence or two into the plate.
So, what does this mean for RBS? Well, it’s simply too soon to tell, because there are several other investment groups preparing bids to acquire the branches. But it is an interesting thought. In fact, the Church’s consortium already owns a chunk of Barclays. The fund has declared its position, not only about banking, but regarding any entity in which is decides to invest, that “Ethical conduct cannot simply be enforced. We will know that Barclays has truly transformed when it inspires its staff to make sustainable profits through serving its customers and fulfilling its fundamental role in society.”
Some may wonder if the Church investing in RBS is a good thing or a bad thing. Certainly there will be some who will say that the Church should not be investing in anything. These type are usually quite passionate. They are also, typically, conveniently forgetful of the Parable of the Talents recorded in Matthew 25 and Luke 19. A proper rendering of those passages has not only a spiritual application, but a practical one as well. These ignorant inspirationalists fail to recognize the Jesus spoke about money more often than He spoke about Heaven or Hell. So it would seem, without launching into a deep theological discussion, that the Church of England should attempt to make wise investments rather than burying its “talents” in the ground.
I admit that there might be some downsides to the Church investing heavily in the new banking entity. There is also the axiom that “one bad apple spoils the bunch.” From that perspective, one might be concerned that the fraud committed at high levels of the UK banking entities might creep into the Church. But, using another analogy, if you are going to cut out the cancer, you’ve got to get inside in order to remove it.
By now you probably realize that I favor the idea that, in a situation where a return to ethics and serving others is desperately needed, some entity with both the commitment and the power to introduce a culture of moral character is exactly what is needed to return the Bank to its former glory.
Will it happen? That remains to be seen. RBS share price was done 1.0% to 273.10 today at mid-afternoon. As far as I’m concerned, it’s far better than having the branches owned by Roman Catholic priests.
Be sure to read the following recent ADVFN stories about RBS:
Lloyds and RBS sale to create “new generation of shareholders”
RBS: The 21st Century Prodigal Son
Stephen Hester quits as RBS chief
Lloyds Banking, RBS, Barclays – Latest Technicals
