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Unformatted text preview: RBS 22 nd April 2008 Booking Reference: 44690853 Presenters • Sir Tom McKillop • Sir Fred Goodwin • Guy Whittaker Operator: Good afternoon ladies and gentlemen. Today’s conference will be hosted by Sir Tom McKillop, Group Chairman, Sir Fred Goodwin, Group Chief Executive and Guy Whittaker, Group Finance Director. I will now hand over to Sir Tom. Sir Tom McKillop: Good afternoon ladies and gentlemen, or at least afternoon in the UK, morning to you in the United States. I hope you’ve had an opportunity to read the company announcement which RBS made today. The board has taken decisive action to rebase our capital ratios. This reflects deterioration in markets in March and also our views on the economic outlook going forward for the rest of the year. The rebasing will increase our core, tier 1, and our tier 1 to levels much more appropriate to the market we believe we are in today. We believe that by year end we will have - assuming the implementation of the capital plan laid out - we will have by year end a tier 1 in excess of 8% and a core tier 1 in excess of 6% by the end of ’08. The key elements of the announcement are £12 billion rights issue; that will be 11 new shares for every 18 existing shares at 200 pence per share. In addition to the rights issue there is the prospect of disposals which could contribute £4 billion to capital. In addition, for capital planning purposes, we have assumed that we may take write downs, in the course of 2008, equivalent to £5.9 billion before tax; net of tax £4.3 billion. These are the key elements together with our views on business going forward which the board has factored into this rebasing of our capital. I think we want to get on quickly to our Q&A but before doing that I would like to hand over to Sir Fred Goodwin to give you an update on how we’re seeing business. 1 Sir Fred Goodwin: Thanks Chairman. Within today’s announcement there is also a trading update for the first quarter of 2008. I hope you’ve had a chance to read through that. In short, the promise of the group and can be reviewed in two parts - there’s GBM and all of the businesses apart from GBM. GBM has been affected by markdowns in relation to its credit market exposures and these are set out in detail within the document. In terms of the exposures themselves, they are the same exposures as we had marked at the end of 2007, but you will see that in the context of our capital planning around the rights issue we have put in some very stringent mark downs in relation to the individual asset categories and we are happy to take any questions on that later, but I hope you would agree in looking at them that they are stringent marks and represent - certainly based on contemporary knowledge - a conservative stance in relation to those exposures....
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This note was uploaded on 02/13/2011 for the course ECON 101 taught by Professor Jan during the Spring '11 term at Benedictine KS.
- Spring '11