RBS chief to say sorry at fundraising vote

LONDON (Reuters) - Royal Bank of Scotland's (RBS.L) chairman will apologise to shareholders for bringing the bank to its knees at a meeting to vote on a 20 billion pound fundraising plan on Thursday, the Scotsman newspaper said.

Tom McKillop will tell investors, customers and staff at a meeting in Edinburgh he is "profoundly sorry" for the reversal from record profits of over 10 billion pounds last year to needing to ask for a government bailout, the Scotsman said.

RBS's second request for funding this year has been prompted by billions of pounds in losses on structured credit assets hit by the credit crisis, pressure on capital from last year's purchase of parts of Dutch bank ABN AMRO and the prospect of a recession in many countries.

Shareholders are expected to approve the plan. The bank needs the backing of a majority of voters. Over 96 percent of investors at rival Lloyds TSB (LLOY.L) on Wednesday backed its part in the government rescue plan.

RBS shares jumped 13 percent to 48 pence by 12 p.m., bucking a weak broader European bank sector.

Analysts said approval of the vote has long been seen as a formality, but investors were encouraged by the prospect of a massive cash injection at a price well above the market price.

"The market is reminding itself that (UK finance minister) Alistair Darling is going to be writing a cheque for 15 billion pounds and paying 65.5 pence for shares that last night were trading at 42p," said Ian Gordon, analyst at Exane BNP Paribas.

RBS shares are down 87 percent this year.

Shares in Lloyds and HBOS HBOS.L, the two other banks also receiving state funds, were both up over 10 percent, despite the DJ Stoxx European bank index .SX7P falling 2 percent.