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Three wisemen come bearing gifts to RBS
The going rate for a £12bn rights issue humiliation is three new directors it seems. In RBS world, that is. By that measure Bradford & Bingley should be getting one tenth of a new non-exec any day now.
The Royal Bank of Scotland Group plc (”RBS”) announces today that Stephen Hester, John McFarlane and Arthur (Art) Ryan have been appointed Non-Executive Directors of RBS with effect from 1 October 2008.
Hester is CEO of British Land and Deputy Chairman of Northern Rock (’till Oct. 1). MacFarlane was CEO of Australia and New Zealand Banking Group and Ryan Chairman, CEO and President of Prudential Inc.
The long-awaited appointment is of course meant to assuage investor concerns following the rights issue and (also humiliating) £681m first-half loss. Indeed, the shares are up about 1.5 per cent to 221 pence this morning.
That may be little consolation to shareholders who’ve lost some 53 per cent of their investment over the past 12 months.
That there’s any positive reaction at all will be more of a comfort to beleagured CEO Fred Goodwin who, in addition to being the walking dead here on FT Alphaville since April, has been under pressure to resign as shareholders blame him for some ill-advised decisions, including the €71bn consortium acquisition of ABN Amro at the start of the credit crunch.
Will three wisemen be enough to silence his detractors? A 3¼p share increase suggests they might be expecting a slightly larger gift.
Related links:
The Lex Overpaid CEO Award - FT
RBS beefs up board with non-execs - FT
‘Numbed and galvanised’ at RBS - FT Alphaville
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With all due respect to the individuals who have taken the RBS chalice, their appointment fails to address the fundamental problem with the RBS acquisition of ABN AMRO (other, of course, than paying through the nose). What RBS bought was a small and loss making US corporate/debt bank, a Continental European franchise that basically relied on a small and loss making UK trading hub, and a reasonably profitable, emerging markets Asia corporate/investment bank. I fail to see how appointing guys with UK, US and Australia experience really plug that knowledge gap. Wouldn’t it be brave and insightful for RBS to appoint someone to the board who doesn’t come from the Anglo Saxon club?