27 Feb 2009

Former bank boss refuses to give up pension

4:16 pm on 27 February 2009

The former chief executive of the Royal Bank of Scotland says he is not prepared to give up his huge pension despite calls from the government that he do so.

Sir Fred Goodwin, 50, is entitled to Stg 650,000 a year for life under the terms of his retirement from the British bank last year.

Sir Fred has already made it crystal clear that he has no intention of handing back part or all of the money.

He argued that when he left the bank Finance Minister Lord Myners was made aware of his pension arrangements and indicated that no further gestures would be requried.

Lord Myners described that decision as "unfortunate and unacceptable".

Prime Minister Gordon Brown has already said that ministers will look at a possible legal redress.

The Royal Bank of Scotland reported a loss of Stg 24.1 billion on Thursday - the biggest loss in British corporate history.

Sir Fred quit as the head of RBS last October when the bank was forced to take Stg 20 billion in emergency state funding.

He was regarded as one of the world's top bankers after a string of acquisitions made his Edinburgh-based bank one of the world's biggest across Europe, the United States and Asia.

But his takeover of Dutch bank ABN AMRO in October 2007 proved a deal too far - it was ill-timed, ramping up investment banking exposure and eroding capital just as the financial crisis took hold.

The British government has a direct stake of 70% in RBS after bailing it out.