Banking: Royal Bank of Scotland silent on plan to ask for "billions"

Britain's second-biggest bank is refusing to confirm or deny reports it is planning to ask shareholders for billions of pounds in an attempt to shore up its finances.

Sky News understands the Royal Bank of Scotland will be aiming to raise EUR 10 billion through a rights issue. RBS, in common with other banks, has been badly hit by the global financial crisis. If it goes ahead with the rights issue, it would be the first UK bank to take such a step. There are suggestions others, including Barclays, could quickly follow suit. A rights issue would see existing RBS investors offered new shares at a possible discount price.

The move could put further pressure on group chief executive Sir Fred Goodwin, however. It has been claimed shareholders may insist he moves aside in return for the cash injection.

According to reports, the rights issue is being arranged by Goldman Sachs and Merrill Lynch.

Republished with permission FOCUS News Agency

Mike Hitchen, Mike Hitchen Consulting
Publisher ofi On Global Trends and Sydney Irresistible