RBS shareholders will never recover money they lost

Sir Philip Hampton said investors who owned RBS shares before its £45.5bn bailout in October 2008 were likely to be dead before the bank’s value recovered to anything close to its pre-crisis level reports The Telegraph.

“I don’t think shareholders wealth is likely to be restored any time in my lifetime or some lifetimes beyond,” said Sir Philip, who was brought in as the bank’s chairman in January 2009.

“Many thousands of shareholders lost an awful lot of money. We’ve still got a lot of baggage to clear up, which will be difficult,” he said.
RBS shares hit a six-month low during yesterday’s trading session and ended the day down 3pc at 20p.

At their high in March 2007, RBS share were worth just over 600p, meaning that £100 invested in the bank’s shares then would now be worth about £3.30.

A share restructuring plan, which was approved at today’s annual investor meeting will see the bank swap 10 of its existing shares for one new share. As a result of the scheme, which will take effect from June 6, the bank’s share price will increase 10-times, pushing the share price to about 200p – the first time RBS shares will have traded at that price since September 2008.

RBS avoided the shareholder protest votes that have hit other major British businesses during the so-called “shareholder spring”. However, with UKFI, which manages the state’s 82pc holding in the bank, voting in favour of all the bank’s resolution a protest vote was never considered likely.

Sir Philip told shareholders that despite chief executive, Stephen Hester, coming under pressure to give up his bonus the “great majority” of institutional investors had been in favour of awarding him the all-share payment worth nearly £1m.