RBS chairman shares 'disappointment'

THE chairman of the Royal Bank of Scotland told shareholders today he shared their disappointment in the performance of the institution.

Sir Tom McKillop spoke to a packed conference room of shareholders who were still reeling from yesterday's announcement that the Edinburgh-based bank, Britain's second largest, was launching a record £12 billion rights issue.

The chairman insisted that this news was in the best interest of shareholders.

The bank's board and the 600 shareholders who filed the hall at the Edinburgh International Conference Centre were greeted outside by a crowd of angry climate-change protestors.

But shareholders added their voices of discontent with the bank's management over the £59 billion takeover of Dutch bank ABN Amro during the worst period of the credit crunch.

Speaking outside the Edinburgh meeting one shareholder blasted the handling of the acquisition and the board's failure to own up to the reality of the bank's losses.

Charles Davidson, a shareholder for nearly 20 years, said: "I shouldn't think inefficiency warrants any type of patience or a bonus for the chief executive.

"What confidence can one have today that we will get answers? Really, it is a joke. They should be embarrassed."

And as soothing panpipe music was played into the tense auditorium, another shareholder commented: "Today we are looking for a bit of contrition. They must have known this was going to happen and we're looking for someone to admit that."

However, after delivering the bank's 2007 results, Sir Tom fended off the first question put to him from the crowd on whether or not the bank's optimism on the future was just "paper talk".

The shareholder put to Mr McKillop: "It is unbelievably bad management to have gone down this road."

But Mr McKillop remained calm and told the expectant audience that the bank could face the challenges of the deteriorating global markets.

He said he still firmly believed the Amro takeover to have strengthened the bank's global position in a time when the market was extremely volatile.

And he added that the rights issue was in the best interests of shareholders and the future of the bank.

He said: "Our decisive action to re-capitalise by raising the rights issue reflects deteriorating market conditions and outlooks in what has become a very different world for banks like ours."