FACTBOX - RBS set for record loss

(Reuters) - Royal Bank of Scotland said it could post a 2008 loss of up to 28 billion pounds, a record for a British company, while the government said it will raise its stake in the lender to 70 percent.

The 282-year-old bank has been hit by a string of problems in the past year, mainly due to too many takeovers and losses in its investment bank. Here are key events in its fall from grace:

CHARTER ONE, M&A:

After widespread praise for the acquisition of NatWest in 1999 Chief Executive Fred Goodwin led a series of takeovers, including a $10.5 billion (7.2 billion pound) deal for U.S. bank Charter One in 2004. Goodwin was criticised for overpaying, prompting one analyst to accuse him of megalomania.

RBS said on Monday it expected a goodwill impairment of 15 billion to 20 billion pounds, which will include significant goodwill on past U.S. deals, notably Charter One but will mostly reflect the collapse of ABN's valuation...

ABN AMRO PURCHASE:

RBS led a European consortium that also included Santander and Fortis to buy Dutch bank ABN AMRO for 70 billion euros in October 2007, outgunning Barclays to land the deal by paying a higher price mostly in cash.

RBS paid about 10 billion pounds for its portion, mainly investment banking business. The consortium was criticised for not cutting its offer as the financial crisis began before the deal was sealed, and bank valuations have crashed since.

INVESTMENT BANK BUILD-UP:

RBS ramped up in investment banking over a number of years, and its global banking and markets arm delivered a 3.8 billion pound profit in 2006, 40 percent of the group total. But the financial crisis has highlighted the risk of the aggressive strategy, and RBS has written down billions on the value of structured credit and other assets.

"RBS leveraged itself up too much in the good times," Chief Executive Stephen Hester said on Monday. The bank is shrinking its balance sheet, but more losses are expected to feed through.

CAPITAL CUSHION:

RBS carried less capital than most banks, preferring to run a lean and efficient balance sheet. This included buying back shares and bumping up the dividend in 2006. It has since said its capital cushion was too thin.

RIGHTS ISSUE:

RBS in June raised 12 billion pounds in the biggest ever rights issue, to repair a balance sheet weakened by the ABN deal and writedowns. Investors subscribed to 95 percent of the shares at 200 pence each.

GOVERNMENT RECAPITALISATION:

Britain injected 20 billion pounds into RBS as part of a recapitalisation of the sector in October following a confidence crisis after Lehman Brothers' collapse. It gave the state a 58 percent stake after existing shareholders largely shunned a rights issued priced at 65.5 pence per share. Goodwin resigned and was replaced by Hester.

BRITAIN INCREASES STAKE:

The government is swapping up to 5 billion pounds of preference shares for ordinary shares, potentially increasing its stake to 70 percent. Hester said the move was at the request of RBS, to remove annual interest of about 600 million pounds. It was part of a new government plan to kick-start lending by banks to the broader economy.

RBS shares slid by two-thirds on Monday to 10 pence, their lowest level for more than a quarter of a century on concern rising bad debts could force a full nationalisation. Hester said that was not the government's plan. "It was discussed only as something that we all wanted to avoid."

(Compiled by Steve Slater)