RBS says no regrets on ABN, sees more benefits

LONDON (Reuters) - Royal Bank of Scotland (RBS.L) on Thursday rejected criticism it had overpaid for last year's record purchase of Dutch bank ABN AMRO, as it significantly raised the benefits it expects from the deal.

"We are happy that we bought what we thought we were buying," said Fred Goodwin, chief executive of RBS, after saying ABN's 2007 results were as it had expected.

Goodwin, who led a consortium that bought ABN for 71 billion euros ($107.2 billion), the world's biggest bank takeover, said it remained "unequivocally" a good deal despite financial market turmoil adding to criticism of the purchase.

"I don't get a lot of things coming across my desk that are 9 percent earnings accretive," he said.

RBS said it expects the deal to boost annual earnings by 9 percent by 2010, up from its estimate of 7 percent when it made the takeover offer last July.

That was because RBS raised its annual cost and revenue benefits estimate from the deal by a third to 2.3 billion euros.

Much of this was due to economies of scale, such as being able to buy stationery cheaper, Goodwin said.

"There were no Eureka moments, it was all mundane, which we found reassuring, and we found the numbers we had were conservative," Goodwin said as RBS detailed its higher cost savings alongside its 2007 results.

The Edinburgh-based bank bought ABN's wholesale banking and Asian operations, while Spain's Santander (SAN.MC) and Belgian-Dutch bank Fortis (FOR.BR) took other ABN businesses. RBS said the cost of its assets had dropped to 10 billion pounds ($19.8 billion) after it sold ABN's global clients activities business in Brazil to Santander for 750 million euros.