THE head of one of Royal Bank of Scotland's biggest shareholders has renewed the pressure on the bank's bosses by saying they have "quite a lot to answer for".
Insurance giant Legal & General (L&G) said that chief executive Sir Fred Goodwin and chairman Sir Tom McKillop should be held more accountable for the bank's current woes.
The Edinburgh-based giant has seen its shares lose two-thirds of their valu
e as the credit crunch continues to bite.
Dan Burgess, head of equities at L&G's fund management arm, has now revived talk of an exit for Sir Fred and Sir Tom.
He said: "They both have quite a lot to answer for. We have seen the 11 top executives leave UBS, the heads of Citigroup and Wachovia step down and the chief executive at Merrill Lynch go, but only one UK director (Steven Crawshaw of Bradford & Bingley] has had to leave a UK bank and that was because he had angina. You have to say that is curious."
He said that Sir Fred and Sir Tom were equally to blame for the bank's deteriorating performance following its £12 billion rights issue and its £56bn acquisition of Dutch bank ABN Amro.
In Europe, the heads of UBS and Societe Generale have stepped down, while the chief executive of Fortis – part of the consortium led by RBS in the bid for ABN – was forced to resign this month.
Mr Burgess said shareholders are likely to become more outspoken about the need for change as market conditions worsen.
"The downturn in markets will test everyone – shareholders and companies – and you will see shareholders becoming more vocal in expressing their views in ways they haven't done before."
There was some good news for RBS today as it emerged that plans to sell the Australian and New Zealand arms of ABN Amro could be back on.
Clydesdale Bank owner National Australia Bank earlier this week announced that it had ended talks about a deal, believed to be worth £600 million.
Now the Commonwealth Bank of Australia (CBA), the country's second largest lender, is said to be in exclusive talks with the Edinburgh-based bank about a deal.
Morgan Stanley analyst Richard Wiles questioned the need for CBA to complete a deal. He said: "CBA does not need to acquire the capabilities of ABN Amro and can grow its financial markets business organically."
The full article contains 407 words and appears in Edinburgh Evening News newspaper.
