rbs

The Royal Bank of Scotland Group plc (RBS)is a holding company of The Royal Bank of Scotland plc and National Westminster Bank Plc, which are United Kingdom-based clearing banks. The Company’s activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On October 17, 2007, RFS Holdings B.V. a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V.
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Are the current RBS difficulties caused by the ABN acquisition, the RBS business model of focusing on capital efficiency or poor risk management?
RBS paid £ 10 billion for 38% of ABN. Was the transaction –
Which, if any, of the RBS management should be replaced?
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Latest News

Goodwin refuses to reduce his pension

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RBS announces £ 40.7 billion pre-tax loss for 2008

2008 Key points  Strategic Review The Group is announcing a sweeping restructuring plan aimed at restoring standalone strength. We expect to: – Shift ~20% (£240 billion) of funded assets to Non-core Division for disposal/run down over 3-5 years – Deliver substantive change in all Core Division businesses each of which must meet 5 key tests1 – Centre on UK with smaller, more focused global operations – Radically restructure GBM, taking out 45% of capital employed – Cut more than £2.5 billion out of the Group’s cost base – Have access to the Government Asset Protection Scheme – Drive major changes to management, processes and culture  Key Financials – pro forma Our...

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RBS announces Pay and Bonuses

Released 15:27 17-Feb-09 The Royal Bank of Scotland Group plc RBS announces Pay and Reward Settlement for 2008 RBS Group can confirm that it has reached agreement with the UK Government as majority shareholder (through UK Financial Investments) on its approach to Pay and Reward for 2008/09.The outline of the approach is as follows:  No Reward for Failure: No bonuses or pay increases will be made to staff associated with the major losses suffered in 2008.  Board Remuneration: As previously announced Board Executive Directors will receive no bonus for 2008 performance and no pay increase in 2009.  Pay 2009: Agreement has been reached with Unite in the UK for staff which they represent below managerial grades. Ongoing discussions with staff representatives are taking place in...

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Ex-Chairman of Royal Bank of Scotland says ABN was a “bad mistake”

Tuesday, 10 February, 2009. Sir Fred Goodwin, CEO and Sir Tom McKillop, Chairman of Royal Bank of Scotland and Andy Hornby, CEO and Lord Stevenson of Coddenham, Chairman of HBOS today faced the UK Parliamentary Treasury Select Committee Inquiry on the Banking Crisis. Sir Tom McKillop stated that the acquisition of ABN Amro was a “bad mistake”. He stated that he believed that the whole of the goodwill would have to be written off. He agreed that RBS bought ABN Amro at the top of the market was sorry "we bought". Both of the CEO's and both Chairman agreed that compensation systems in...

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RBS fires seven Board members

RBS announces Board restructuringThe Board of RBS Group has been considering its future shape in recent months, especially in light of the commitment to appoint three new Non-executive Directors made at the time of the recapitalisation of the Group in October 2008. The Board has determined that a restructured Board with a smaller number of directors will be better able to engage effectively in the restructuring process for the RBS Group going forward. As of 6 February 2009, and ahead of the appointment of three new Non-executive Directors to be completed with the approval of UKFI, the Board of RBS Group will comprise:    Chairman Sir Philip Hampton   Group Chief Executive Mr Stephen Hester Group Finance Director Mr Guy...

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Recent Events - RBS

RBS Recent Developments 

-Consortium Acquisition of ABN Amro

-2007 Record Group Operating Profit of £ 10.3 billion

-10% increase in dividend

-Sub-prime & Leveraged Loan Losses 2007 to 1st Qtr 2008 £ 8.080 billion 

-£ 12 billion rights issue

Consortium Acquisition of ABN Amro

In October, 2007, a consortium led by RBS acquired ABN Amro. The consortium included Fortis Bank and Banco Santander.  As part of the transaction, RBS acquired 38.4 % of the assets of ABN for a consideration of £ 10 billion (net of disposals and cash). RBS financed its share of the acquisition with 25% equity and 75% cash. Although, towards the closing of the transaction, the sub-prime credit market deterioration had begun to push share prices in financial institutions downwards, the RBS chairman subsequently confirmed that the Consortium was not able to renegotiate the offer price. The initial synergistic benefits were estimated to be £ 1.7 billion, subsequently increased to £ 2.3 billion at the 2007 results announcement. 

2007 Group Operating Profit

On 28 February, 2008 RBS announced a record Group Operating Profit of £ 10.3 billion a 9% increase over the prior year. Profit after Tax rose 18% to £ 7.7 billion.  Negative adjustments relating to sub-prime exposure were £ 1.895 billion.  The Board increased the dividend by 10%. The Tier 1 Capital Ratio was 7.3%  and Total Capital Ratio of 11.2%.

2008 Trading Update

In its trading update on 22 April 2008, RBS announced that it would take additional charges against its sub-prime and leveraged loan positions of £ 5.9 billion, bringing the total for 2007- 2008 year to date to £8.080 Billion (us$ 12.88 billion). 

£12 billion rights issue

On the same day as its trading update announcement was made, RBS confirmed its plan for a fully underwritten rights issue with the net proceeds of £ 12 billion, (a record in the United Kingdom). Less than eight weeks earlier, the Group CEO had stated that the RBS Group “had no plans for any inorganic capital raising”. With underwriting fees expected to be 1.75%, the cost of the rights issue will exceed £ 200 million. The Group also said it had plans to dispose of certain assets with an expected benefit of £ 4 billion.
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