On 22-Apr-08 the Royal Bank of Scotland said that it planned to raise 12 billion pounds ($23.7 billion) through right issue.
The Right issue or the sale of shares to existing shareholders is an attempt by RBS to restore its capital base.
The rights issue marks an embarrassing U-turn for the bank.
Less than two months ago, the bank said it did not need to raise capital.
On 22-Apr-08, Sir Fred said the cash was required because "the world had changed".
RBS deserves credit for being the first U.K. bank to admit it needs significant help from shareholders.
The issue, which will be sold at a 46% discount to21-Apr-08 share price, will swell the share count 60%. To top it off, the bank will cut its cash dividend per share.
The bank said the rights issue would raise its Tier-1 capital ratio — a measure of financial strength — to 8 percent and its “core” Tier-1 capital ratio — the most liquid type of capital and a key measure of financial strength — to 6 percent by the end of 2008. The minimum for U.S. banks to be viewed as well-capitalized by regulators.
Pressure is mounting on Goodwin and the bank's chairman Sir Tom McKillop following £12bn call cash. RBS board is letting Mr. Goodwin stay. His supporters think the bank needs him for the integration of ABN.
The chairman Tom McKillop defended the chief executive Fred Goodwin, saying “our executive team has all the ability to steer the bank through this tricky period in financial markets.”
The bank has announced the appointment of three extra non-executive directors, in what some have seen as a move to reduce Sir Fred's dominance.
RBS's credit ratings came under pressure, with Fitch Ratings cutting one notch to AA and Moody's Investors Service warning it could strip the bank of its Aaa rating. Standard & Poor's said it maintained a negative outlook on the bank.
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The Right issue or the sale of shares to existing shareholders is an attempt by RBS to restore its capital base.
The rights issue marks an embarrassing U-turn for the bank.
Less than two months ago, the bank said it did not need to raise capital.
On 22-Apr-08, Sir Fred said the cash was required because "the world had changed".
RBS deserves credit for being the first U.K. bank to admit it needs significant help from shareholders.
The issue, which will be sold at a 46% discount to21-Apr-08 share price, will swell the share count 60%. To top it off, the bank will cut its cash dividend per share.
The bank said the rights issue would raise its Tier-1 capital ratio — a measure of financial strength — to 8 percent and its “core” Tier-1 capital ratio — the most liquid type of capital and a key measure of financial strength — to 6 percent by the end of 2008. The minimum for U.S. banks to be viewed as well-capitalized by regulators.
Pressure is mounting on Goodwin and the bank's chairman Sir Tom McKillop following £12bn call cash. RBS board is letting Mr. Goodwin stay. His supporters think the bank needs him for the integration of ABN.
The chairman Tom McKillop defended the chief executive Fred Goodwin, saying “our executive team has all the ability to steer the bank through this tricky period in financial markets.”
The bank has announced the appointment of three extra non-executive directors, in what some have seen as a move to reduce Sir Fred's dominance.
RBS's credit ratings came under pressure, with Fitch Ratings cutting one notch to AA and Moody's Investors Service warning it could strip the bank of its Aaa rating. Standard & Poor's said it maintained a negative outlook on the bank.
Go to Article from The New York Times »
Go to Article form MakrketWatch »
Go to Article from Bloomberg News »
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