The U.K. bank is expecting to make a whopping £4 billion worth of disposals, which could include the sale of the RBS Insurance unit, and that's on top of the £3.5 billion sale of Angel Trains to a consortium including Australia's Babcock & Brown Ltd. and Deutsche Bank AG, which the bank is seen likely to confirm within days.
The share issue along with the disposals could give RBS' boss Fred Goodwin almost £20 billion in his coffers. What would a guy known for aggressive acquisitions -- case in point RBS' joint bid for ABN Amro Bank, which wrested it away from Barclays plc -- do with that kind of money? Some think that, despite the roiled credit markets ailing the financial services industry, Goodwin will seek out more acquisitions. Portfolio's Felix Salmon is one supporter of that idea. He wrote:
CEO Fred Goodwin is giving himself a nice capital cushion here, allowing him to continue to take the kind of risks he loves - maybe even a well-timed acquisition, if something attractive comes along. But it's also clear that buying ABN Amro at the top of the market does look, in hindsight, to have been extremely expensive. And Goodwin's probably quite relieved at this point that he ended up losing LaSalle to Bank of America.
Of course this all depends on Goodwin holding on to his job. There has been a growing chorus calling for his ouster. As a matter of fact, an acquisition -- especially an aggressive one -- could be what leads shareholders to oust him. As The Daily Telegraph noted, shareholders are asking for assurances that RBS doesn't use the capital infusion for dealmaking. And while others believe an ouster of Goodwin is unlikely, just take a look at Wall Street's CEO shuffle for what's possible. - Matthew Wurtzel
