Royal Bank of Scotland Group is being probed by the Financial Services Authority over its €14.3 billion takeover of parts of ABN Amro.
Former chief executive Fred Goodwin pushed through the purchase of Amsterdam-based ABN Amro with partners Banco Santander SA of Spain and Belgium’s Fortis after global money markets froze in 2007. The acquisition saddled RBS with bad debt, depleted its cash reserves, and led it to report a loss for 2008 of £24 billion loss, the biggest reported by a UK company.
News of the investigation was contained in the bank's first-half results.
"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 bank said in its first-half results published August 7th.
"The group and its subsidiaries are cooperating fully with this review."
Linda Harper, a spokeswoman for RBS, declined to comment further. Abi Jones, a spokeswoman for the Financial Services Authority, also declined to comment.
Mr Goodwin, who had been CEO since 2000, was ousted last year following a £20 billion state bailout. The government owns 70 per cent of the Edinburgh-based bank.
Bloomberg