$12bn RBS rights issue rumored

18 April 2008

The UK's second-biggest bank will announce a rights issue next week worth up to $24 billion, Reuters reports.

An anonymous "industry source" claims that financial pressures brought about by RBS' takeover of ABN Amro last year have resulted in the bank's decision.

The slowdown in inter-bank lending has resulted in many banks having problems with generating revenue - though the rumored announcement would be the first of its kind in the UK since the beginning of the credit crunch.

In a statement, RBS said that the decision over the rights issue would be addressed at the firm's annual general meeting - which takes place in Edinburgh, Scotland next Wednesday.

"[RBS] notes recent speculation about a possible rights issue. RBS confirms that its Interim Management Statement covering trading performance and capital will be made next week," the statement added.

Sir Fred Goodwin, head of RBS, met British prime minister Gordon Brown earlier this week with other bank chiefs in order to discuss potential ways of easing the ongoing liquidity crisis on the markets.

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