21 Nov 2008

Bank of Scotland boss apologises to shareholders

11:00 am on 21 November 2008

The outgoing head of Royal Bank of Scotland has apologised to shareholders for the company's financial troubles which have led to a state bailout.

RBS chairman Tom McKillop said on Thursday he was "profoundly sorry" for the human and financial cost borne by those who invested in the bank.

RBS was one of three banks rescued by the British government last month after being hit by the financial crisis.

At an extraordinary general meeting in Edinburgh, shareholders backed plans to raise Stg 20 billion in fresh capital as part of the rescue deal. The bank said the vote was more than 99% in favour.

Under the recapitalisation plan, RBS will ask for Stg 5 billion from the British government in return for preference shares. It will also seek Stg 15 billion from shareholders in a share placing underwritten by the Treasury. That means that the British government could end up owning a 60% stake in the bank.

In October, the government bailed out HBOS, Lloyds TSB and RBS in Stg 37 billion after they were hit by the global credit crunch and resulting financial crisis.