RBS Rights Issue - 95% take up PDF Print E-mail
Royal Bank of Scotland says it has won overwhelming backing from shareholders for its £12 billion cash call - the biggest rights issue in UK corporate history. Britain's second largest bank confirmed that shareholders representing more than 95% of its stock had taken up the offer to buy discounted shares by Friday's deadline. But as one angry shareholder said in the Extraordinary Meeting in May, ..we have no other option." The money raised by selling the shares will allow RBS to shore up its finances and cover hefty losses sparked by the credit crunch. The cash call marked an abrupt U-turn for RBS after it had said earlier this year it did not need to raise capital.
 

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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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RBS - majority owned by Government

28 November 2008 RBS today announces that, as at 11:00am on 25 November 2008, being the latest date for receipt of valid subscriptions, it had received valid acceptances in respect of 55,977,458 new RBS ordinary shares, representing approximately 0.24 per cent. of the total number of new RBS ordinary shares offered to shareholders pursuant to the 18 for 13 Placing and Open Offer announced by RBS on 13 October 2008 (the "Open Offer").  In accordance with the arrangements set out in Part III of the Placing and Open Offer prospectus dated 4 November 2008 (the "Prospectus"), at closing HM Treasury will take up the remaining 22,853,798,818 new RBS ordinary shares, for which valid acceptances were not received. As a result, HM Treasury will own approximately 57.9 per cent. of the enlarged issued ordinary share capital of RBS.

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RBS Shareholders Voted in favour of new Share Issue

20 November 2008.At a general meeting today, Royal of Scotland shareholders voted 99.28% in favour of a £ 20 billion capital raising. The capital will comprise £ 15 billion in new ordinary shares underwritten by the government and £ 5 billion of preference shares to be purchased by the government leading to a potential 60% of the bank being under state ownership.Prior to the vote the Royal Bank of Scotland Chairman, Sir Tom McKillop said "I expressed the considerable regret of the board at the time of both our rights issue in the spring and in October when this further capital raising...

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RBS capital increase, Board changes, bonus restrictions

RBS has announced its intention to raise another £ 20 bn, Sir Fred Goodwin (CEO)is to leave the bank, Sir Tom McKillop (Chairman) is to leave at the next AGM and Jonny Cameron is to step down from the board.

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RBS changes its Board

27 August 2008The Royal Bank of Scotland Group plc ("RBS") announces today that Stephen Hester, John McFarlane and Arthur (Art) Ryan have been appointed Non-Executive Directors of RBS with effect from 1 October 2008. RBS also announces that Lawrence (Larry) Fish and Charles (Bud) Koch will retire as Non-executive Directors of RBS ahead of the AGM in April 2009.

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RBS reports 1st half loss.

8 August 2008.  The Royal Bank of Scotland has reported a loss of £ 691 million for the 1st half of 2008. This is the first loss reported by the bank in its 40 years as a public company and the second biggest loss ever reported by a UK bank. The results were serverly hurt by the write-downs of £5.9 billion.Many believe that shareholders will now demand the removal of either the Chairman or Group Chief Executive.An extract from the Group's press release follows. 

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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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