Shares underwater but Rose need not hit the bottle

HERE’S the joke without a punchline doing the banking rounds this morning: Alison Rose walks into a pub. Drinks very heavily. That’s it.

By common consent, the incoming Royal Bank of Scotland chief executive already has the hardest job in UK banking. On the face of it, and indeed the back of it, today’s numbers hardly suggest it is going to get much easier.

But let’s find reasons to be cheerful. For one, though we have been here before, things can surely only get better. Perhaps Ross McEwan’s parting gift to Rose before he swans off to Australia was to chuck as much bad news as he could into his last quarterly report.

That should mean that Rose’s first results, the full-year figures in February, will be sprightly.

One worry for RBS has been the intensely competitive nature of the mortgage market, which has seen profit margins crushed.

The bank might regret having made such a fuss about those margins, and might want to note that while the market is definitely tough, its returns on equity are actually fairly decent. Since RBS is a leveraged bet on the UK economy, the downward pressure on the shares is unlikely to ease while Brexit uncertainty remains. That’s a frustration to Rose and to the Government. On the other hand, Chancellor Sajid Javid will have noticed that RBS paid £2 billion of dividends into Government coffers in the past year. He might think that the underwater share price means he has an excuse to hold off on a share sale and keep spending that cash. Perhaps The Saj does a secret fist pump every time RBS shares fall.