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Ex-RBS boss holds up hands to ABN 'error'
Hugo Duncan10 Feb 2009
Former Royal Bank of Scotland chairman Sir Tom McKillop today admitted the takeover of ABN Amro was "a bad mistake".
The shamed banker told MPs on the Commons Treasury Select Committee: "We bought it at the top of the market and anything we paid was an error. We are sorry we bought ABN Amro. The deal was a bad mistake."
Asked how much RBS overpaid for ABN, McKillop replied: "Everything we paid has not been worth it."
RBS led a consortium including European rivals Fortis and Santander, which paid a total of ¤71 billion for ABN just as the credit crunch took hold in autumn 2007.
The ill-fated deal - following a bidding war with Barclays - brought RBS to its knees. To survive, last year it had to go cap-in-hand to the Government for a £20 billion bailout.
The once-proud Scottish institution is now 68% owned by the taxpayer and is heading for annual losses of £28 billion - the biggest in British corporate history.
McKillop today said the RBS contribution to the ABN deal was about £10 billion and admitted that "the bulk will be written off as goodwill".
Michael Fallon, the senior Tory MP on the committee, blasted: "You've destroyed a great British bank and cost the taxpayer £20 billion."
McKillop and his chief executive Sir Fred Goodwin were ousted after the Government rescue, but today the former chairman insisted that the entire RBS board shares the blame for the ABN deal.
"The board had 18 meetings at which ABN Amro was considered," said McKillop.
"At every stage, the whole board considered it and was unanimous. It is wrong to characterise it as a proposition driven by Sir Fred that the board was unable to stop."
Both McKillop and Goodwin claimed there was a good financial case for the deal at the time, pointing out that it was supported by shareholders and regulators.
"At the time it didn't seem like a bad mistake," Goodwin said.
New RBS chief executive Stephen Hester is due to appear before the committee tomorrow along with a relieved John Varley, his counterpart at Barclays, who lost out to RBS in the disastrous battle for ABN.
