Sorry Seems To Be The Hardest Word For RBS
Sir Fred Goodwin was forced into a grovelling apology to shareholders after Royal Bank of Scotland, the banking giant that he controls, announced pre-tax losses of nearly £700 million - the second worst ever by a British bank. So what has gone wrong and what can Sir Fred do about it?
A quick straw poll around the City seems to indicate that the majority of analysts believe that Sir Fred's tenure at the bank is coming to a close. He has been at the helm through some major changes, expansion and ultimately some great profits over the years but has 2007/08 been too much for him?
After announcing the largest rights issues in UK history, some £12 billion, many had thought the group was back under control and over the worst. However, the board of RBS was forced to issue update after update charting the ailing fortunes of the group immediately after the fund raising was announced. What started as a well planned and well flagged fund raising soon turned into a PR disaster with institutions forced to stump up massive amounts of cash to save the group.
Subsequent attempts to sell off the company silver also seem doomed to failure with the insurance division set to go for a fraction of the £7 billion valuation initially mentioned to possible bidders.
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