'The World's Worst Bank' Makes Progress, But...

There's always a 'but'.

Rory Cullinan runs the world’s worst bank from a fifth-floor office overlooking Liverpool Street station in London.

His 400-person outfit doesn’t lend money or trade securities. Instead, it sells blown-out mortgages, busted loans and entire companies amassed by Royal Bank of Scotland Group Plc before it collapsed in the global financial crash of 2008.

On a Friday afternoon in February, Cullinan is savoring a new feeling in his life as a toxic-asset disposal specialist: hope that the worst is finally over.

After four years of marathon dealmaking, Cullinan’s Non- Core Division has whacked a $390bn financial junk pile down to $85.9bn and eased pressure on RBS’s balance sheet. That’s been Chief Executive Officer Stephen Hester’s No. 1 priority since the government saved RBS from insolvency beginning in late 2008 with a $67.8bn lifeline - the biggest bank bailout in history, Bloomberg Markets magazine will report in its May issue.

'RBS was obviously bankrupt, and there was a lot of tension, a lot of chaos, and I was living in here', says Cullinan, 53, a silver-haired Scot who speaks with the speed of a dealmaker in a hurry. 'Now, it’s a paragon of calm'.

While Cullinan’s so-called bad bank has made progress, Hester, 52, faces turmoil in almost every other part of RBS as he struggles to return the firm to profitability and pay back taxpayers. In the decade before the credit crisis, Edinburgh- based RBS epitomized the empire building that turned staid High Street lenders into systemic threats.

Hit the link below to access the complete Bloomberg Markets magazine article:

RBS on Brink of Profit Seen by Van Saun as King Urges a Breakup

Bundesbank Said to Investigate Deutsche Bank Over Losses

Ex-Goldman Trader Admits to Hiding $8 Billion Position

image: © Daniel Oines

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