RBS chiefs face shareholders over cash boost demand
Royal Bank of Scotland (RBS) bosses faced tough questioning form shareholders
Wednesday about the reasons that led Britain's second largest bank to launch a
record rights issue of 12 billion pounds (24 billion dollars) to bolster its
At the RBS annual general meeting in Edinburgh, Scotland, bank chiefs were accused of "bad management" and criticized for the scale of the pay deals they received.
But participants said there were no calls for board members - or chief executive Fred Goodwin - to resign.
The Financial Times said Wednesday that Goodwin was likely to come under pressure to outline a plan to step down "within a year."
Goodwin, 49, has led the bank's massive expansion in recent years which included the takeover of Dutch banking giant ABN Amro last year - a move believed to have made RBS more vulnerable to the credit crunch than other banks.
The call for new funds came less than two months after the bank declared its capital base was satisfactory.
On Tuesday RBS also revealed further write-downs of 5.9 billion pounds from risky investment and mortgages - the biggest credit crunch losses admitted so far by a British bank.
Goodwin, who has led the bank since 1998, earned the nickname "Fred the Shred" for his rigorous cost-cutting drive at the Edinburgh-based bank.
The banking boss, who took home a pay package of 4.2 million pounds last year, including a bonus of 2.9 million pounds, was criticized at the meeting for the scale of his remuneration while "shareholders are getting their money halved."
RBS chairman, Tom McKillop told the meeting that the board was taking its "responsibilities very seriously."
"We do feel we are asking a lot of shareholders, these are very large numbers," he conceded.
However, he believed that the action taken was in the "right interest of shareholders."