In March 2000, The Royal Bank of Scotland (RBS) acquired the UK-bank NatWest in a £21 billion deal that was then the largest take-over in British banking history. The acquisition was considered at the time to be a masterstroke of strategy and execution. Thus began a ‘golden period’ in RBS’s near 300 year history. RBS embarked on an ambitious strategy to transition from a regional to global financial services firm and one that drove aggressive revenue growth. RBS’s stock price grew and performed well in the early years of the 2000s and by 2007 the now global financial player was viewed by most analysts as a highly successful bank. For instance:
- From 1997 to 2007 Earnings per share (EPS) had grown from about 50p to close to 250p
- In 2007 RBS reported a record group operating profit of £10.3bn (£7.7bn after tax)
- RBS increased its assets by a multiple of 29 between 1998 and 2008 (assets grew by an average of 41% per year)
- It moved from outside the top 20 global banks by market capitalization prior to its acquisition of NatWest to ninth in the world by 2007
Then the Credit Crunch and disaster: RBS essentially failed in October 2008. To prevent collapse the UK Government injected
