RBS review gets underway after £20bn bail-out agreed

A full review of Royal Bank of Scotland gets under way today after shareholders overwhelmingly approved a £20bn (€23bn) bail-out plan for the company.

The bank’s new chief executive Stephen Hester conceded that job losses were expected, but said he wanted RBS to move forward following its financial difficulties.

At a general meeting of the RBS Group in Edinburgh yesterday shareholders voted 99% in favour of the rescue plan, which will see the bank offer £15bn (€17bn) in new ordinary shares, with the Government promising to buy up any remaining.

The UK Government has also committed to buying £5bn (€5.9bn) in preference shares which RBS will buy back in time.

The drastic fundraising move – which could put nearly 60% of the company in public hands – comes on top of a £12bn (€14.2bn) rights issue by RBS earlier this year before the financial crisis worsened.

During yesterday’s meeting, outgoing chairman Tom McKillop and former chief executive Fred Goodwin apologised to shareholders for the company’s financial situation.

Mr Hester replaces Fred, who tendered his resignation in October and stood down from his post yesterday.

Tom told shareholders the “full strategic review” would focus on the businesses where RBS had stable, profitable and market-leading customer franchises.

He added: “Stephen has the full support of us all in leading RBS back to the world-class status and financial returns that we can all be proud of. We must now look forward and this is the focus of everyone in the group.

“A new chapter in the RBS story must begin.”

Mr Hester said he expected there would be job losses at the company.

He added: “We all have to make sure we give our people a sense of optimism and look to the future and not the past.”

“I am really optimistic that the colleagues that I have met are up for the new journey.”