Royal Bank of Scotland executives yesterday defended a £12 billion rights issue and told shareholders the "decisive action" left the bank well placed to seize growth opportunities.
Executives at Britain's second-largest lender have come under fire from investors since plans for the record cash call emerged, over what many saw as a radical U-turn for a bank which had long denied a need to shore up its balance sheet.
"The time had come to take decisive action to rebase the capital," chairman Tom McKillop told shareholders at the annual meeting.
RBS has brushed aside concerns about its top management team but some major shareholders have said Mr McKillop, chief executive Fred Goodwin and the board would have to work to keep their backing, calling for a succession plan to be put in place.
"It's a painful decision and an unwelcome decision, but I passionately believe it was the right one," Mr Goodwin said of Tuesday's rights issue.
Asked about the volte-face at the bank, which insisted as late as February that there was no need to raise capital, he said events in March were "unprecedented", citing a sharp drop in asset valuations and a deteriorating economic outlook.
Small shareholders at yesterday's meeting agreed with Mr Goodwin, blaming the economic turmoil that has battered the industry for RBS's woes, with most naming him as the right person to guide the bank through its troubles - for now. Many of the 400 attendees at the annual general meeting said Mr Goodwin should be given a year or two to see through the financial market turmoil and integration of Dutch bank ABN Amro.
But one investor slammed the pay of executives in light of the crisis. "Bonuses have a corrupting influence on people's judgments. Our guys are paid as if they are superhuman and it's very clear that they're not," John Stein said at the agm.
The bank's remuneration policy was approved with 91.4 per cent of votes cast.
All directors up for re-election yesterday, including Mr McKillop, were approved, with some 98 per cent of the votes cast.
