Page 20 - RBS – ABN takeover

As always, and as Northern Rock and the sub-prime crisis has shown so

dramatically, banking is a confidence business.

Sir Fred was already under pressure before the ABN bid for being a "serial

acquirer" of rival banks. His time, it was thought, should be spent concentrating

on driving through cost efficiencies in his own bank than scouring the world

looking for smaller rivals to buy. A year earlier he was forced to back off and

hand cash back to shareholders and give assurances that acquisitions would be

curbed. However, Sir Fred had made it clear that Asia-Pacific was also where he

wanted to be. Furthermore, accepted wisdom saw Sir Fred’s mode of operation

as ‘never allowing the bank to overpay’. The on-message line at his HQ at

Gogarburn was that RBS was a leader in terms of extracting value from

acquisitions and that the ABN deal should be viewed over the economic cycle,

not in the short-term context of recent difficulties.

Furthermore, Sir Fred’s strategy was built on the need for a consortium bid as it

was considered that overlapping US business made RBS more suited in this