Monthly Archives: February 2015

The RBS Balance Sheet.

RBS is The Royal Bank of Scotland and NatWest, as well as through a number of other well-known brands including Citizens, Charter One, Ulster Bank and Coutts.

We are only a few months away from The Royal Bank of Scotland publishing the 2014 annual report.


Here was can see the 2013 annual report. Some salient facts are found there:

Page 174.

Cash and balances at central banks £82,659 million. (yes £82 Billion)
Loans and advances to customers £440,722 million
Derivatives £288,039 million
Total assets: £1,027,878 million (yes that is over £1 trillion, about 67% of UK annual GDP)
Customer deposits £414,396million  (yes £414 Billion of customer cash in accounts)

The size of the bank’s balance sheet is vast.

Renewable energy

The economics of renewables will have the ability to creates more jobs than other sources of energy. Most of these will be created in the struggling manufacturing sector. Clear to see, the making of new substations, wind turbines and solar cells for example which will pioneer the new energy future by investment that allows manufacturers to retool and adopt new technologies and methods.

E2V plc

E2V was formerly EEV of Chelmsford, (English Electric Valves)

For a period it was a part of the UK’s General Electric Company, (GEC), known as Marconi Applied technologies, and then in 2002 a well thought out management buyout supported by 3i following the collapse of the renamed GEC as Marconi plc due to the poor leadership of Lord Simpson.

In in 2004 the company floated on the London Stock Exchange.


A £405m valued company, today is a UK plc success story in high technology in the areas of aerospace, defence, space, medicine and security.

A dividend yield of 2.4% for a technology company, this is incredible. A major investor is RIT Capital Partners plc (The Rothschild Family) whose wealth is managed by RIT Capital Partners.

The Renewables Infrastructure Group (TRIG)

The Renewables Infrastructure Group (TRIG) is listed investment company seeking to produce long-term, stable dividends, by investing in a portfolio of 29 predominantly operational assets which generate electricity from renewable sources, with a particular focus on onshore wind farms and solar photo voltaics parks.


A £426m investment fund.

Managed by Infra Red Capital Partners, [] a major shareholder in The Renewables Infrastructure Group is Investec Wealth & Investment Limited.

As the UK economy moves from a fossil fuel based electricity producer, we seeing massive investment in green technology, and remember, the fuel for renewables is free.

The Legal & General Worldwide Trust

The Legal and General Worldwide Trust, is designed to give worldwide exposure and access to a range of Legal & General funds in a single investment vehicle while offering long-term growth potential.


A £102million fund, its top 10 holdings are:

Legal & General UK Smaller Companies Trust 15.13% of the fund
Legal & General UK Index Trust 9.62% of the fund
Legal & General Dynamic Bond Trust 8.70% of the fund
Legal & General US Index Trust 7.82% of the fund
Legal & General European Trust 7.18% of the fund
Legal & General UK Alpha Trust 6.97% of the fund
Legal & General European Index Trust 6.46% of the fund
Legal & General North American Trust 5.92% of the fund
Legal & General Pacific Growth Trust 5.82% of the fund
Legal & General Japan Index Trust 5.73% of the fund

As one can see it gives international exposure to global markets and indices.

UK HM Government January 2015 borrowings…

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties. Another deficit month, thus to bridge the gap, needs to borrow on the bond market.

In January 2015, the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement.

There were “only” 4 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office ( to raise cash for HM Treasury :-

06-Jan-2015 2¾% Treasury Gilt 2024  £3,024.940 million
07-Jan-2015 0 1/8% Index-linked Treasury Gilt 2044 £1,040.780 million
15-Jan-2015 4½% Treasury Gilt 2034 £1,889.840 million
20-Jan-2015 2% Treasury Gilt 2020 £3,750.000 million

When you add the cash raised:-

∑(£3,024.940 million + £1,040.780 million + £1,889.840 million + £3,750.000 million) = £9,705.56 Million

£9,705.56 Million = £9,705.56 Billion

On another way of looking at it, is in the 31 days in Jan 2015, HM Government borrowed:-

£313 million each day for the 31 days. We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature 2020, 2024 2034 and 2044. All long term borrowings, we are mortgaging our futures, but at least “we are in it together….

The Laffer curve

This is an economic hypothesis that show a potential relationship between government tax revenue (income) and the rates of general taxation in the economy.

What it simply means is this:-

Punitive tax rates may not generate much additional tax revenue for the government if people respond in ways that result in less taxable income.

So for example if the country raises ist tax rates so high, people may stop working, as it is not worth the effort as the government will effectively take all their income in a form a taxation. Or individuals will resort to tax avoidance strategies to hide their wealth. Thus zero or little tax revenue.

Like wise, if taxes are super low, then people work harder, but then government makes no gain on this hard work and productivity boost, as the taxation rate is so low.

Thus it makes it hard for governments to the right balance on taxation. The curve itself is linked to Arthur Laffer, but Laffer himself has pointed this work to the academtic work from the 14th century Arab Muslim social philosopher Ibn Khaldun

UK Hydro Electric Power.

Flowing water is a valuable renewable energy source, and the most modern hydroelectric power stations are capable of converting at least 90% of their energy into electricity. (The other 10% is lost as noise of the flowing water, friction creates heat as the water flows down the pipes).

The Committee on Climate Change which advises the HM Government estimates that hydroelectric power could theoretically contribute up to 8 billion kilowatt-hours (kWh) of electricity per year to the UK’s energy needs.

Hydroelectric power stations in the United Kingdom accounted for 1.65 GW of installed electrical generating capacity, being 1.8% of the UK’s total generating capacity and 18% of UK’s renewable energy generating capacity.

The reality is that storing electricity is actually quite hard, you can have chemical storage, such as a battery, or converting Potential Energy to Kinetic Energy. This is the essence of Hydro Electric.

Large-scale hydroelectric power stations need to dam valleys to create reservoirs in which to store water. For the installation to include pumped storage – a technology that improves the reliability of the power station by storing energy for later use – two reservoirs must be situated close together, but at different heights.

Not many sites in the UK meet these conditions. Most of those that do are in the Scottish Highlands and are already home to large-scale hydropower schemes. These schemes generate about 1.4% of the electricity used in the UK, but due to the lack of other suitable sites, this figure is unlikely to increase significantly.

This is a non-exhaustive list of UK Hydro Electric Sites:-

Cruachan Dam
Dinorwig Power Station
Ffestiniog Power Station
Glendoe Hydro Scheme
Maentwrog Site
Aigas Power Station
Cashlie Power Station
Cassley Power Station
Ceannacroc Power Station
Culligran Power Station Unit 2
Dinas Power Station
Dolgarrog High-Head Power Station
Dolgarrog Low-Head Power Station
Grudie Bridge
Invergarry Power Station
Kinlochleven Hydro Power Station
Livishie Power Station
Mossford Power Station
Orrin Power Station
Pitlochry Power Station
Quoich Power Station
Shin Power Station
St Fillans
Torr Achilty Power Station
Alt na-Lairgie
Beeston Weir
Black Rock
Braevallich Hydro Station
Broken Cross Muir Hydro
Chliostair Power Station
Cuileig Power Station
Culligran Comp Set
CWM Rheidol Hydro Dam
Douglas Water Power Station
Drumjohn Power Station
East Aberchalder
Elan Valley
Eredine Hydro Project
Falls Of Unich
Fasnakyle Power Station
Foyers Fall Power Station
Franklaw Hydro at Franklaw Water Treatment
Garrogie Power Station
Glenn Dubh Hydro
Inverar Hydro
Kerry Falls
Kielder Power Station
Kilmelford Power Station
Kingairloch Hydro
Little Loch Roag
Llyn Brianne
Llyn Celyn
Loch Dubh
Loch Eilde Mor
Loch Ericht Power Station
Loch Gair
Loch Turret WTW
Lochay Compensation Generator
Lochiel Estate
Lubreoch Power Station
Maldie Burn
Mary Tavy Power Station
Mullardoch Tunnel
Nostie Bridge
River E Power Station
Sron Mor Power Station
Stonebyres Power Station
Storr Lochs
Striven Power Station
Urlar Hydro
Victoria Falls Station

Yes, 109 sites in the UK