Hand over your cash: how banks are mugging investors

Neil Collins says the rights issues recently announced by RBS, Bradford & Bingley and HBOS are a sign of desperation — and their terms are an insult to loyal shareholders

Within the next few days, half a million savers with the former Halifax Building Society will receive a fat, bewildering and highly complex document. It will invite them to buy more shares in HBOS, the company that now owns Halifax after its merger with Bank of Scotland, at what at first glance seems a highly attractive price. If they also happen to be shareholders in Royal Bank of Scotland, they’ll have received a matching batch of gobbledegook from it too.

Between them, these banks are asking their shareholders for £16 billion, although ‘asking’ in this context is rather like the bank teller being asked to hand over the till’s contents by a masked man with a sawn-off shotgun. Shareholders who ignore the offers will find themselves worse off as a result.