RBS says strong enough to meet challenging 2009

LONDON (Reuters) - Royal Bank of Scotland said on Tuesday just as its shares were hammered by worries it needs a capital boost that the outlook for 2009 was "challenging" but it has a strong enough franchise to meet the test.

"The outlook for 2009 is challenging and presents a changing competitive landscape," RBS said in slides accompanying a speech given by Chief Executive Fred Goodwin earlier on Tuesday. "We have franchise and operational strength to meet these challenges," the slides added.

RBS shares fell over 30 percent as Britain's government is considering injecting capital into top UK banks, industry sources said. That could dilute shareholders and raised concerns that capital at the banks was tighter than previously estimated. The shares were last down 25 percent at 110 pence.

RBS said in a brief statement it had not made a request to the government for capital.

Goodwin's slides for his speech at the Merrill Lynch banking conference said the bank was delivering on its integration of ABN AMRO assets and said it had "the flexibility to respond to organic opportunities as they emerge."

(Reporting by Steve Slater; Editing by Greg Mahlich)