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Date: Monday 13 Oct 2008

LONDON (ShareCast) - Royal Bank of Scotland chief executive Fred Goodwin has stepped down as the group asked the government for £20bn to bail it out of its financial hole.

RBS is to offer £15bn worth of new shares at 65.5p to be underwritten by HM Treasury. In addition, HM Treasury will subscribe for £5bn of Preference Shares.

The capital raising will increase RBS's pro forma core tier 1 and tier 1 capital ratios by approximately 3 percentage points and 4 percentage points respectively, on a proportionally consolidated basis.

RBS added it would maintain the availability of small business and mortgage lending at least at 2007 levels.

Goodwin is to be replaced by Stephen Hester, currently Chief Executive of British Land. British Land said a suitable date for Hester to take up his appointment will be agreed shortly between both companies.

Chairman Sir Tom McKillop will retire while Johnny Cameron, Chairman Global Markets, will also step down with immediate effect.

"The steps we have announced today, taken in conjunction with the Government, will secure a stronger future for the RBS Group. We regret having to raise new capital but believe that decisive action is necessary in this unprecedented market environment", McKillop said.

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