The chief executive of Royal Bank of Scotland is stepping down as the bank announced it will raise £20 billion of new capital as part of the government's bailout package.
Sir Fred Goodwin had been under considerable pressure to quit his job after the bank's share price collapsed. He was also criticised for his decision to pursue the takeover of ABN AMRO last year despite the fact that the effects of the credit crunch were already apparent.
The 50-year-old was appointed to his position in 2000 and earned a reputation for buying banks on the cheap and cutting their costs, including staff, as seen in the purchase of NatWest, earning himself the nickname Fred the Shred.
Reports suggest that his aggressive leadership brought personal financial rewards and last year he is alleged to have been paid £4.2 million, including a £2.86 million bonus.
Sir Fred will be replaced by Stephen Hester, currently the chief executive of British Land and RBS chairman Sir Tom McKillop is also reported to be standing down in April.
The Treasury has announced today that it expected the government to own 63 per cent of RBS and will appoint three board members following a combined £37 billion bailout of RBS, Lloyds TSB and HBOS.
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