SIR Fred Goodwin will today attempt to silence his critics by unveiling what he hopes will be seen as a bold package of measures aimed at restoring RBS's battered balance sheet.
The chief executive of the UK's second-largest bank is expected to propose a rights issue to raise between £10 billion and £12bn; report a subprime-induced write-down of up to £7bn; and signal that some lucrative assets are for sale.
Goodwin a
nd Sir Tom McKillop, the company's chairman, are understood to be determined to resist calls from some quarters for them to quit over their stewardship of the bank.
But in the light of growing private criticism that the Edinburgh-based institution is too "Scots dominated", they are said to be searching for a senior banking figure to strengthen the board.
Today's announcement will mark the beginning of a concerted attempt by Goodwin and McKillop to regain the initiative after several days of damaging speculation.
They will then have to assess the effect of their announcement on the markets before facing shareholders at the company's AGM tomorrow.
As well as the rights issue, which could be the largest in UK history, the company is in the process of selling train-leasing business Angel Trains, which is likely to fetch more than £3bn. It could also look for offers for its insurance business, which includes Direct Line and Churchill – potentially worth more than £5bn. Observers believe that the company will not have difficulty in putting the insurance business on the market as it does not carry its RBS branding.
Yesterday, there was support for the Goodwin and McKillop strategy from ratings agency Standard and Poor's. It said: "In our view, the shift in the level of capitalisation required for a bank such as RBS is less a function of its acquisitions than a more general reflection of the development of the financial market crisis.
"We do not share the view, therefore, that a capital raising would necessitate the departure of a management team that has a successful track record in efficient integration of acquisitions."
However, one senior business source put it differently, saying: "Just because you are a Scottish company, you do not have to be so Scottish.
"The Scottish domination of the board has to end. The relics of the old regime have to make way for people with greater international experience."
The full article contains 411 words and appears in The Scotsman newspaper.
