Royal Bank of Scotland will cut more jobs, Chairman Philip Hampton warned on Friday as he called for an end to the public flogging of the state-rescued bank over its past mistakes.
Hampton rounded on the legacy of former chief executive Fred Goodwin, saying in a speech due to be delivered to shareholder meetings later on Friday that his takeover of Dutch rival ABN Amro had been the wrong deal at the wrong price.
Addressing public anger over a pension of 703,000 pounds a year awarded to Goodwin, Hampton also said the bank was taking legal advice over the payout and new chief executive Stephen Hester's contract ensured no more rewards for failure.
Some of the practices that were accepted at the height of a boom when the bank was recording 10 billion-pound profits, cannot be acceptable now if indeed they ever really were, Hampton said, pointing to sponsorship of Formula 1 motor racing and an order for a corporate jet that has now been cancelled.
Echoing comments made last month, RBS said it believed Goodwin was still thinking about a request made by the company in January that he forfeit some of the pension.
Shareholders will get an opportunity at Friday's meeting to publicly vent their anger over the lender's near collapse last year and are expected to make the largely symbolic gesture of rejecting the bank's report on 2008 executive pay.
The government, which became majority shareholder in RBS last October after resuscitating the bank with a 20 billion pound injection of taxpayer's money, has already said it will vote against RBS's 2008 remuneration report.
Goodwin and the bank have been at the centre of public anger over the near collapse of the banking system.
Protesters targeted an RBS branch during this week's meeting of G20 heads of government in London while windows were smashed and a car damaged last month in an attack on Goodwin's home.
Small shareholders arrived for Friday's meeting amid tight security with their anger and dismay tempered by hopes the bank's new management could orchestrate a turnaround.
Obviously from the reports today the domestic bank is in safe hands, said private shareholder James Hogarth. Like a lot of people I bought RBS shares with a pension lump sum. It hasn't turned out for the best.
Shares in RBS have slumped from over 600 pence in early 2007 to around 30 pence and Friday's meeting takes place almost a year after RBS launched a surprise rights issues that shareholders subscribed to at 200 pence a share.
Having already announced around 2,700 job cuts after RBS chalked up a record 24.1 billion pound loss in 2008, Hampton said it was too early to say how many more jobs would be lost but this was not the end of the process.
WRONG PRICE, WRONG TIME, WRONG DEAL
Hampton said shareholder scrutiny and strong disapproval was understandable but said it was time to move on.
I believe we should bring an end to the public flogging, Hampton said. We have suffered a major financial hit and continued collateral damage from public criticism will compound the problem not resolve it.
He said the bank had a clear and agreed roadmap to return to standalone strength in the next three to five years.
RBS's shares were up 13.1 percent at 31.9 pence at 1:36 p.m. having earlier risen to 33.5 pence and their highest level since mid-January. The jump came as a deadline loomed for shareholders to subscribe to the bank's latest share issue.
Former chief executive Goodwin was widely lauded for his audacious takeover of bigger British rival NatWest in 2000.
But his final acquisition -- a 10 billion-pound purchase of parts of Dutch rival ABN Amro at the onset of the credit crunch -- has been blamed for helping bring the bank to its knees.
Hampton said the ABN Amro buy had been the wrong price, the wrong way to pay, at the wrong time and the wrong deal and that the bank believed that without the acquisition it would have made an operating profit last year.
I don't think there can be any doubt that the key decision that led RBS to its difficulties was the acquisition of ABN Amro, he added.
(Writing by Paul Hoskins; Editing by Greg Mahlich and Jon Loades-Carter)