RBS 2008 Annual Report Download - page 3

RBS Group Annual Report and Accounts 20082
Chairman’s statement
Despite this, I believe strongly that RBS can be successful once
again. I am privileged to have been given the opportunity to
chair the Group. This remains a truly international company with
many excellent businesses. Our roots may be in Scotland and
our largest market in the UK, but we also employ 10,000 people
in India, enjoy strong positions on the island of Ireland through
Ulster Bank and in our United States markets through Citizens.
The Global Markets businesses are precisely that: global. They
will continue to operate in the leading financial centres, supporting
our corporate, institutional and financial sector clients around
the world. The international nature of the Group is reflected by
the fact that during 2008 we were able to benefit from liquidity
support provided by central banks in a number of jurisdictions.
With hard work, determination and a willingness to take tough
decisions we have the people and capabilities to enable the
Group to recover. We can make it a profitable investment, a
model corporate citizen in all of the countries in which it
operates and an excellent place to work.
Justifying the support of our shareholders
Twice during 2008 the Group sought additional capital from
shareholders to enable it to weather the very testing environment
and to achieve the higher capital ratios that markets now demand.
On the second occasion, the capital raising was underwritten by
the UK government and in November it became the Group’s
majority shareholder.
The UK government wants RBS to operate on a commercial
basis and intends to act as an arms length commercial
shareholder, which will sell its interests in RBS and other banks
at the earliest attractive time. Our interests coincide. We are
working to restore the Group’s financial performance in order to
allow us to repay the UK taxpayer as soon as is practicable.
An inevitable but regrettable consequence of the successive
capital raising exercises has been the dilution of the interests
of existing shareholders. My predecessor Sir Tom McKillop
apologised to shareholders for the impact on them of the
erosion of their investments, a sentiment I echo. Those of us
now charged with leading RBS are committed to implementing
measures which will allow us to restore the Group to standalone
financial health in the interests of all shareholders.
It is not appropriate to pay any dividend on the ordinary shares in
2009. However, the Board is very mindful that dividends are an
extremely important part of shareholder return and income. It is
the Board’s intention over time to return to paying dividends,
taking account of the Group’s capital position, retained
earnings and prospects. To that end, we welcome the fact that
the existing prohibition on the payment of dividends on the
ordinary shares will be removed when the preference shares
held by UKFI are redeemed.
My first statement to you as Chairman
follows an exceptionally difficult period
in the history of The Royal Bank of
Scotland Group. The last 12 months
or so have been painful for our
shareholders and employees and
sometimes testing for our customers.
We owe our continued independence
to the UK government and taxpayers
and are very thankful for their support.
The external environment has seen
unprecedented turbulence in bank and
other financial markets and deteriorating
economic conditions around the world.
Our disappointing financial results
reflect these circumstances and our
exposure to them.