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by Rachel Robson

‘As far as Royal Bank of Scotland shareholders are concerned, there is only one reason for the bank’s current problems,’ says The Telegraph’s Philip Aldrick, following news that the bank may launch a rights issue to support its capital base. ‘Sir Fred Goodwin overpaid for Dutch rival ABN Amro last year,’ Aldrick continues. It’s an opinion shared by both The Guardian’s Nils Pratley and The Independent’s Jeremy Warner. The acquisition of ABN Amro, according to Warner, has ‘made an already bad situation worse’, while Pratley says that when the credit crunch struck, the acquisition became a ‘don’t-do deal.’ ‘It should have been a time to walk away,’ Pratley argues. ‘Sir Fred carried on. It was a bad mistake at a bad moment.’

Aldrick also says that Sir Fred had not ‘accounted for the severity of the credit crunch’, and has now made ‘no secret that life is more difficult than anyone had anticipated’. He continues: ‘In such testing times, weak banks are punished. RBS shares have underperformed those of its peers on fears that it will be less able to withstand the looming downturn.’

RBS has continued to insist there is no need to raise capital, says Warner, because ‘in time, internally generated earnings will return the capital ratios to a more comfortable position.’ Warner goes on to point out that this is not the view of either the Bank of England or the government, which both ‘reasonably ask why they should be expected to bail out the banking system with constant infusions of liquidity while bankers brazenly pay out record bonuses and dividends.’

But following the recent warning, Pratley says the ‘unwritten rule’ is that it’s time for the RBS chief executive to ‘pack his bags’. He continues: ‘When the company is a bank that last year led a huge cross-border takeover, and then declined to walk away from the deal when the credit markets blew up, it is hard to believe that shareholders would make an exception.’ But Warner is less dismissive of Sir Fred. ‘Personally, I cannot see what purpose would be served by throwing Sir Fred to the wolves,’ he says. ‘Whatever his faults, he’s a banker of world-class stature and proven track record.’