The future of RBS chief executive, Sir Fred Goodwin hangs in the balance following news of the banks £12 billion rights issue.
Shareholders are due to meet with the banks bosses today in Edinburgh at the bank's annual meeting, where it is predicted Sir Fred's ability to head RBS may come under scrutiny.
Only two months ago, in his annual statement, Sir Fred commented on the banks strength and growth predicted for 2008, he said: "Whilst the future seems as difficult as ever to predict, it is clear that we enter 2008 with real momentum behind our organic growth, and with our product range, distribution capabilities and customer franchises materially enhanced.
"Coupled with our greater presence in the world's largest and fastest growing economies, there is much to be done, but a confidence that it will be, to the benefit of our shareholders, our customers and our employees." Sir Fred concluded back in February.
Turn to today, and the facts tell a different story, RBS yesterday confirmed the launch of a £12 billion rights issue and indicated it may be forced to sell its insurance arm in attempts to boost its flailing balance sheet.
In addition to this sharp u-turn it is thought that Sir Fred will come under fire over the expensive acquisition of ABN Amro. The €71 billion take over fell victim to bad timing as the economy began to crash and has inevitably contributed to the banks need to raise capital.
As RBS and its shareholders meet today to discuss ways of recovering the bank and its reputation, buy to let mortgage
specialist Bradford & Bingley faces speculation over its balance sheet and the possibility of a rights issue.
Two weeks ago, Bradford & Bingley was forced to issue a statement denying an imminent rights issue, arguing it had a 'strong capital base.' However, the banks failure to totally rule a rights issue out has led to speculation.
Despite doubt, group chief executive, Steven Crawshaw, spoke yesterday of Bradford & Bingley's strong position in an attempt to quash further rumours, he said: "The first quarter of 2008 has seen excellent growth in our retail deposit base. Bradford & Bingley has a strong capital base and has funded its business activities through 2008 and into 2009.
"We have a focused strategy, and a business model that is adaptable to changing market conditions." Mr Crawshaw concluded.
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