RBS acquisition of ABN being reviewed by FSA
It has appeared that Royal Bank of Scotland's (RBS) acquisition of ABN Amro and its £12bn rights issue is being investigated by the Financial Services Authority. The mention of the inquiry was typed in a footnote in RBS's interim results.
The note by RBS read: "In April 2009 the FSA notified the group that it was commencing a supervisory review of the acquisition of ABN AMRO in 2007 and the 2008 capital raisings. The group and its subsidiaries are co-operating fully with this review."
Back in October 2007, Dutch bank ABN Amro was bought by RBS, along with Santander and Fortis for €70bn, thereby beating Barclays for the company. A lot of criticism was faced by the bank for continuing with the deal, since it was carried out amidst financial crisis.
A £12bn rights issue was launched by the RBS, six months after the acquisition, with the aim of dealing with its financial problems. However, the cash inflow was not sufficient, and the bank had to be rescued by the government.