ABSTRACT
The Royal Bank of Scotland (RBS) was founded by Royal Charter in 1727, and as with many traditional financial institutions took a conservative, prudent path through the centuries, until the heady days of the early 2000s presented a radically different strategic scenario buttressed by a dramatice change in prudential values. The RBS crisis saga is one of overreaching ambition and excessive hubris from the CEO and his senior executives in a context where the financial institutions had become highly acquisitive, with an appetite for risk that was almost insatiable. In rapid succession RBS took over a range of other financial institutions including Citizens Bank, Royal Insurance, Charter One, NatWest and ABN AMRO. Until 2007 RBS was perceived as a highly successful bank. There had been significant growth in earnings per share (EPS) in the ten years between 1997 and 2007, and the 2007 results in February 2008 revealed a record group operating profit of £10.3bn (£7.7bn after tax).
