Wikipedia

Tom McKillop

For the Scottish footballer, born 1917, seeTom McKillop (footballer).

Sir Thomas Fulton Wilson McKillop,FRS,FRSE(born 19 March 1943) is a Scottish chemist, who was CEO ofAstraZeneca PLCfrom 1999 until 2006 and chairman of theRBS Groupfrom 2006 until 2008.

Early life

edit

McKillop was born inDreghorn,a small village inNorth Ayrshire.He was educated atIrvine Royal Academyand thenGlasgow University,where he took a BSc (Hons) and PhD in chemistry. He joined theICIPetrochemical & Polymer Laboratory (later renamed the ICI Corporate Laboratory) atRuncornin 1969 after post-doctoral research work in Paris. He moved to ICI Pharmaceuticals Division in 1975 and, having held a number of positions in research, in 1989 he was appointed technical director of ICI with international responsibilities for research, development and production.

Zeneca

edit

In 1993, ICI Pharmaceuticals demerged to becomeZeneca,and in 1994 he was appointed chief executive officer of the new company. In April 1999, Zeneca merged with Astra to formAstraZeneca PLC.McKillop became chief executive officer (CEO) of the merged company. He retired from AstraZeneca on 1 January 2006, when David Brennan took over as AstraZeneca's CEO. McKillop became the chairman of theRoyal Bank of Scotland(RBS). His brother,Alexander McKillop,was professor of organic chemistry at theUniversity of East Angliafrom 1970 to 1996.

RBS

edit
Royal Bank of Scotland's office inFleet Street,London

McKillop then changed from chemistry to banking in 2006. He was chairman RBS from when it accrued a debt of £45 billion, working with CEOFred Goodwin,who promoted aggressive expansion of the bank by acquiring other banks.

On 13 October 2008, British Prime Minister Gordon Brown announced a UK government bailout of £45 billion of new capital into Royal Bank of Scotland.[1]RBS has accrued a further debt of £58 billion since 2008.[citation needed]

By 2008 RBS was the fifth-largest bank in the world by market capitalisation.[2]It rose while aggressively pursuingleveraged buyoutswhich include debt transferral of acquired companies; for example RBS acquiredABN Amrofor €71 billion, while ABN transpired to be worth only half of that. RBS Directors contracted that ABN could keep its collection of priceless art assets as part of the deal. In 2008 RBS also lent $9.3bn, more than double its nearest rival.[3]

From the time that Goodwin took over as chief executive until 2007, RBS's assets quadrupled, its cost-to-income ratio improved markedly, and its profits soared. In 2006 pre-tax profits climbed 16% to £9.2 billion with most of the growth coming from itsinvestment bankingbusiness.

However, following a shareholder crisis meeting in the midst of a $12bn rights issue, McKillop was criticized for "re-arranging the cosy deck-chairs on the sinking titanic", and Goodwin was criticised by RBS shareholders for selling shares at half the price of the shareholder's given value. Having nearly trebled between February 2000 and May 2002 the share price halved from 2006 to 2008. It had lost 95% of its value by 2009.[4]Goodwin was accused of megalomania by some shareholders, as reported byDresdner Kleinwortanalyst James Eden (who said he thought the label was 'unwarranted').[5]After the Bank of China deal, he was forced to promise RBS shareholders he would not indulge in any further big acquisitions and focus instead on growing the group organically.[2]

However, in early 2007, the Dutch bankABN AMROwas under pressure fromhedge funds,includingChris Hohnof the hedge fundTCI,to break itself up to maximise shareholder value. ABN chief executiveRijkman Groeninksuspected RBS of acting in concert with the hedge fundTosca,which was chaired by former RBS chairman Mathewson and recommended the takeover bid of an RBS consortium for €71 billion, against the proposed merger withBarclays Bankfor €61 billion.[6]Goodwin arranged a consortium of RBS,Fortisand former RBS shareholdersGrupo Santander,to purchase the assets of ABN AMRO and break them up in a three-way split. According to the proposed deal, RBS would take over ABN's Chicago operations,LaSalle Bank,and ABN's wholesale operations; while Santander would take the Brazilian operations and Fortis would take the Dutch operations. In a manoeuvre "labelled in all quarters as apoison pill"[6]ABN AMRO agreed to sell key RBS target LaSalle toBank of Americafor $21bn, but in July 2007 the consortium offered the same $98bn for ABN's remaining assets, with a higher cash component (93%).[7]

The deal was struck in October 2007 as theglobal liquidity crisisbegan to develop, with Barclays withdrawing its EUR61bn bid and ABN's shareholders endorsing the EUR71bn RBS takeover.[6]Coming after the nationalisation ofNorthern Rockdue to the freezing of the wholesale money markets, the deal proved the final straw for RBS, as it severely weakened its balance sheet not only through the size of the acquisition but due to ABN AMRO's substantial exposure to the USsubprime mortgage crisis.[2]

While at RBS, the value of the bank's shares fell below a quarter of their level in early 2007. Following criticism from the press for the takeover ofABN AMROand theUK governmenthaving to bail out the bank, McKillop announced his early retirement as chairman of theRoyal Bank of Scotlandon 13 October 2008. At a meeting of theTreasury Select Committeeof theHouse of Commonson 10 February 2009, he admitted to having no qualifications in banking. Like the retired bankers present, he apologised for the bankruptcy for RBS.[8]

Family

edit

Thomas married Elizabeth Kettle in 1966. He also has 8 grandchildren.

Awards

edit

Other positions

edit

See also

edit

References

edit
  1. ^"RBS sale: Fred Goodwin, the £45bn bailout and years of losses".the Guardian.3 August 2015.
  2. ^abcArnott, Sarah (14 October 2008)."The rise and fall of 'Fred the Shred' – Business Analysis & Features, Business".The Independent.London. Archived fromthe originalon 22 November 2008.Retrieved27 February2009.
  3. ^Wall Street Journalblog, 7 January 2009,[1]
  4. ^The Sunday Herald, 17 November 2005Goodwin's Turning Point
  5. ^The Independent,5 August 2005,[2][dead link‍]
  6. ^abcThe Daily Telegraph,9 October 2007,RBS on brink of declaring victory in ABN battle
  7. ^Marketwatch,16 July 2007,Timeline of the battle for ABN AMRO
  8. ^ Regarding the £703,000 retirement payment awarded to Fred in addition to Fred's £4 million pound salary, Tom wrote: "I must emphasise that there was no 'elaborate ruse' by myself and Mr Scott to give Sir Fred any more than he was contractually entitled to and that we and, I believe, all the directors acted in what we judged to be the best interests of the shareholders, including the government." The shareholders were awarded £200 million in compensation for their £12 billion loss. Farrell, Sean (11 February 2009)."Treasury Select Committee: Bonfire of the bankers – Business Analysis & Features, Business".The Independent.London.Retrieved3 April2009.
  9. ^"RSE Elects New Fellows for Outstanding Contribution to Scottish Life".RSE.Retrieved4 December2014.
  10. ^Honorary Degrees 2004Archived21 June 2012 at theWayback Machine,University of St Andrews,15 April 2004, accessed 19 January 2011.
  11. ^"Fellowship of the Royal Society".Royal Society.Retrieved4 December2014.
  12. ^"Annual Review 2006: People, Honours and Awards".www1.hw.ac.uk.Archived fromthe originalon 13 April 2016.Retrieved30 March2016.
edit
Retrieved from "https://en.wikipedia.org/w/index.php?title=Tom_McKillop&oldid=1257804986"