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| Version 1 | Version 2 |
|---|---|
| RBS 'prepares fundraising plan' | RBS 'prepares fundraising plan' |
| (about 3 hours later) | |
| Britain's second largest bank, Royal Bank of Scotland, is expected to ask shareholders for up to £12bn of extra cash to improve its financial position. | Britain's second largest bank, Royal Bank of Scotland, is expected to ask shareholders for up to £12bn of extra cash to improve its financial position. |
| It is thought RBS will try to raise the funds by selling shares to existing investors through a rights issue. | It is thought RBS will try to raise the funds by selling shares to existing investors through a rights issue. |
| Because of the global credit crunch, banks worldwide are keen to shore up their capital positions - and it is thought others may follow RBS's move. | |
| RBS, owner of NatWest, Ulster Bank and insurer Direct Line, has not commented. | RBS, owner of NatWest, Ulster Bank and insurer Direct Line, has not commented. |
| RBS said it would give a trading update next week as planned. | RBS said it would give a trading update next week as planned. |
| In the last few weeks central banks, governments and regulators have been telling banks they need to strengthen their balance sheets. | In the last few weeks central banks, governments and regulators have been telling banks they need to strengthen their balance sheets. |
| If they do so, the Bank of England will start accepting UK mortgage-backed securities in return for government bonds - a move designed to get banks lending to each other again. | If they do so, the Bank of England will start accepting UK mortgage-backed securities in return for government bonds - a move designed to get banks lending to each other again. |
| This is vital for mortgage lenders to reduce their rates on mortgages and revive the housing market, which is looking increasingly gloomy. | This is vital for mortgage lenders to reduce their rates on mortgages and revive the housing market, which is looking increasingly gloomy. |
| Analysts say that while a rights issue will most likely be seen as a prudent, rather than desperate, move by RBS, it will also represent a u-turn for the bank's chief executive, Sir Fred Goodwin, who had previously insisted the bank did not need to tap shareholders for more cash. | Analysts say that while a rights issue will most likely be seen as a prudent, rather than desperate, move by RBS, it will also represent a u-turn for the bank's chief executive, Sir Fred Goodwin, who had previously insisted the bank did not need to tap shareholders for more cash. |