RBS small investors back their man to see crisis out

By Steve Slater

EDINBURGH, April 23 (Reuters) - Royal Bank of Scotland's (RBS.L: Quote, Profile, Research) under-fire chief executive should be given time to see through turmoil in financial markets and integrate ABN AMRO -- at least that is the view of many rank and file shareholders.

But the consensus among them at the bank's annual meeting was that CEO Fred Goodwin should know he only has a year or two to sort out the problems at Britain's second biggest bank.

"Fred has generally done a good job and he's allowed one mistake. He should be given a year or two to see how it goes," said Gregan Crawford, a shareholder from Edinburgh. Goodwin has faced calls to step down from some big investors after he unveiled a 12 billion pound ($23.82 billion) rights issue on Tuesday to rebuild the bank's stretched balance sheet, a U-turn from his past strategy of running a thin capital cushion.

"Getting rid of him now would be a mistake," said Thomas Crosbie, a retired quality surveyor from the city said on Wednesday. "I think this will have been a wake-up call."

A straw poll of eight private shareholders before and after the AGM showed none wanted to see Goodwin ousted now.

"Now they've got themselves into this situation they've got to get themselves out," said William Veitch from Edinburgh.

Several voiced reservations about the bank's acquisition of Dutch bank ABN AMRO last year, which stretched its balance sheet and exposed it more to capital markets at a difficult time. It helped swell the bank's likely writedown on toxic assets to 5.9 billion pounds, adding to its need for new capital.

But even if ABN was a bad deal Goodwin should stay in place to see through the integration, investors said.