Royal Bank of Scotland said today that investors had backed its plans to join a state insurance scheme for toxic assets and raise the government's stake to 84% in another huge bail-out.
The vote, conducted at a shareholders' meeting in Edinburgh, came a day after the European Commission approved the restructuring of RBS, rescued by the biggest-ever taxpayer bailout during the financial crisis.
RBS shareholders voted 99% in favour of the latest bail-out and participation in the state asset protection scheme, the bank said. The scheme will act as an insurance policy for £282 billion sterling of the troubled group's high-risk assets.
The government will meanwhile pump an extra £25.5 billion into RBS. As a result, the state's RBS shareholding climbs to 84% from 70% previously. In addition, RBS will have access to a contingency fund of £8 billion.
The latest bailout puts the government's total RBS commitment at between £60-100 billion, 'the largest amount of state aid ever received by any company in the EU's history,' EC competition spokesman Jonathan Todd said yesterday.
RBS was ravaged by the global credit crunch and its takeover of Dutch banking giant ABN Amro at the top of the market in 2007 before the crisis savaged markets and economies across the globe.
RBS chairman Philip Hampton said the new state help would allow the bank to weather any more economic storms that may appear on the horizon.
RBS also today denied recent media reports that its board had threatened to resign en masse over planned state-imposed cuts to bonuses.
'Contrary to a number of media reports, there have been no threatened mass resignations of the board, at any time,' Hampton said at the Edinburgh meeting. 'The board are wholly committed to their legal and other duties and will remain so, on the basis that they are able to discharge them,' he added.
The reports had emerged prior to British finance minister Alistair Darling's latest budget statement delivered last week. Darling last week slapped a once off 50% tax rate on bankers' bonuses above £25,000 amid mounting public fury at reports that RBS was set to award massive payouts to staff.
RBS reportedly warned that it could struggle to hire and retain key staff after Prime Minister Gordon Brown's government demanded control of its bonuses as a condition for insuring its bad debts and providing more state aid.
