Sir Fred Goodwin, chief executive of Royal Bank of Scotland, faced a barrage of criticism from shareholders at today's annual meeting just one day after he launched a record £12 billion rights issue.

To the packed Edinburgh auditorium, he faced repeated criticisms over the way he and his management team under chairman Sir Tom McKillop had got the bank into such a weak financial position, by pressing ahead with the £59 billion bid for Dutch bank ABN Amro last year just as the banking crisis got underway.

One shareholder told the chairman: "It is unbelievably bad management to have gone down this road."

Charles Davidson, a shareholder for nearly 20 years, said Goodwin should forgo his bonus over the fiasco. "It is a joke. The management should be embarrassed," he added.

A string of brokers downgraded RBS today, with Panmure Gordon's Sandy Chen cutting his price target to 195p, Morgan Stanley to 260p and Lehman Brothers to 305p. The shares were down 18½p to 339½p.

Behind the scenes, institutional shareholders predict that neither Goodwin nor McKillop will be in place this time next year. But McKillop defended the rights issue, saying: "It's often in adversity that competitive advantage is won." Neil Dwane, chief investment officer at fund manager RCM, said: "This is an entire board in denial, who six weeks ago raised the final dividend. Nothing has changed."

One leading institutional investor wanted "a clear indication from the company about when Sir Fred will leave". RBS said yesterday it would bolster the board with three more non-executive directors. "I'm amazed there are no casualties, there doesn't seem to be anyone taking the blame," said Colin Morton of Rensburg Fund Management.

Other shareholders were angry today's meeting in Edinburgh would almost certainly see the approval of Good-win's £2.86 million bonus for last year.