Shareholders approve RBS bail-out plan

Shareholders in Royal Bank of Scotland approved a £20 billion bail-out plan today which could put nearly 60 per cent of the company in public hands.

At a general meeting of the RBS Group in Edinburgh, shareholders voted 99.28 per cent in favour of the proposal, which will see the bank offer £15 billion in new ordinary shares, with the Government promising to buy up any remaining.

The Government has also committed to buying £5 billion in preference shares which RBS will buy back in time.

Royal Bank of Scotland - one of the worst hit by the banking turmoil - is bolstering its finances by offering the shares.

The company's outgoing chairman Sir Tom McKillop and chief executive Sir Fred Goodwin, who steps down today, both apologised to shareholders for the situation the company had found itself in.

Sir Tom said: "A new chapter in the RBS story must now begin."

A full strategic review of the company under the helm of new chief executive Stephen Hester begins tomorrow.

Today he conceded that job losses were expected, but pledged to bring a "sense of optimism" to the company.

Existing shareholders have until Tuesday to take up the offer, but because shares are trading well below the 65.5p offer price investors are likely to snub them.

This leaves the taxpayer - currently sitting on a paper loss of around £5 billion on the new shares - with a potential 58 per cent stake.

Today's meeting took place at the Assembly Hall on The Mound in the Scottish capital.

Addressing shareholders, Sir Tom said they faced "unprecedented" challenges as an institution, a country and part of the world financial system.

"I, as chairman of RBS group, both personally and in the office I hold, am profoundly sorry about the position we have reached," he said.

"I feel this sincerely, on a number of levels and for a variety of reasons, but I want to highlight just a few.

"I am sorry about the very real financial and therefore human cost that those who have invested in us now feel and recognise how seriously this has impacted shareholder confidence in our RBS.

"And I am also sorry if any of our customers have suffered anxiety as a result of the situation."

Sir Tom, who retires as chairman next year, added: "The buck stops with me as chairman and with the leadership of the group.

"Accountability has been allocated and fully accepted."

In response to a request from a shareholder that he personally apologise, Sir Fred told shareholders: "I am extremely sorry that this has come about."