Last week, The Daily Telegraph in the UK broke the story that Royal Bank of Scotland would have a rights issue. The speculation was that it would be for 5 billion pounds.
Man-oh-man, what a difference a few days makes. Official word came today that RBS would have a rights issue of more than twice that amount -- 12 billion pounds.
I don't own RBS, and never have. And I haven't followed the bank closely at all.
But in reading about this developing story over the past week, it's obvious the bank made a poor acquisition of ABN Amro. Followed by the credit crunch.
It's a shame, in a way, because CEO Sir Fred Goodwin had done well by shareholders since 2000 (assuming they bought then). He turned a regional bank into a global player.
We all have 20/20 hindsight, and I have no intention of Monday morning quarterbacking RBS management here. Yet they (and their shareholders) must be wishing they'd walked away from the ABN Amro deal last summer.
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