June 15, 2008 – 6:50 pm

Royal Bank of Scotland (RBS) claimed victory on Monday, June 7, in its historic rights issue. By Wednesday the bank said it had placed 95% of the new shares issued:

Royal Bank of Scotland said all but 5 percent of its shareholders subscribed for its record 12 billion pound ($23.5 billion) rights issue, offering some relief to a bank and sector hit hard by capital worries.

But three members of the 5% not partaking of the issue included high placed insiders.

Royal Bank of Scotland Group Plc’s insurance head was among three executives to take up less than their full entitlement of new stock in the bank’s 12.3 billion- pound ($24.1 billion) rights offer.

Wonder what they know that the rest of us don’t. With the other European banks ready to launch their own issues, first is best before the shares begin to compete with one another.

European banks have a $400bn hole on their balance sheets in spite of a record-breaking week in fundraising from rights issues.

This is a 20 per cent increase from the end of last year, raising a big question mark over the health of the banks and suggesting the credit crisis is deepening, according to Citigroup.

On another front, the Royal Bank of Scotland went back in time last week and issued a relic called the fixed rate mortgage.

In an announcement earlier today, RBS intermediary Partners announced the launch of three new fixed rate mortgage deals. RBS IP is the part of the RBS Group which provides the portal through which mortgage brokers submit applications to all RBS brands, which include First Active, the specialist remortgage lender, and Nat West for buy to let.

What could be next, due diligence?


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