RBS chairman exits ahead of schedule

by Gill Montia

Story link: RBS chairman exits ahead of schedule

Royal Bank of Scotland (RBS) chairman, Sir Tom McKillop, has stepped down from his post earlier than expected.

His exit had been planned for April and his already named successor, Sir Philip Hampton, has taken over with immediate effect.

Sir Tom’s career with RBS effectively ended last autumn when the group needed a £20 billion government bail-out and passed to majority state-ownership.

The accelerated departure means that Sir Tom will not be present at the group’s April annual general meeting when it is expected to confirm a £28 billion loss for 2008, setting a record in UK corporate history.

Both Sir Tom and former RBS chief executive, Sir Fred Goodwin (who has been replaced by Stephen Hester), have been blamed for the bank’s demise.

They stand accused having paid over the odds for Dutch bank ABM Amro in 2007, in what turned out to be the biggest banking takeover in history, and expanding too rapidly into global markets.

Last week, the chief executive of Legal & General Investment Management (LGIM) reported that his company had demanded the resignations of the RBS chiefs in May of last year.

The demand came during meetings with members of RBS’s board shortly after the bank had announced its initial £12 billion rights issue, in April.

As a major investor in RBS, LGIM had been led to understand that the bank had no need to raise capital and once the rights issue was announced the firm asserted that Sir Tom and Sir Fred’s positions were untenable.