Royal Bank of Scotland, which owns Coutts, the UK private bank, confirmed market speculation by announcing it would make a £12 billion ($23.7 billion) rights issue to replenish its capital reserves after booking £4.3 billion in debt write-downs. The rights issue, the largest in UK corporate history, will see RBS investors offered 11 new shares for every 18 they currently own at a price of 200 pence each. "In light of developments during March including the severe and increasing deterioration in credit market conditions, the worsening economic outlook and the increased likelihood that credit markets could remain difficult for some time, the Board has concluded that it is now appropriate for RBS to accelerate its plans to increase its capital ratios," RBS said in a statement to the London Stock Exchange. The decision to raise capital, taking a similar step to that of Switzerland’s UBS earlier this year following the Swiss bank’s massive credit market losses, will put pressure on RBS’s chief executive, Sir Fred Goodwin. Sir Fred is seen as vulnerable to shareholder anger because RBS was in a consortium of banks – Spain’s Santander and the Dutch-Belgian bank Fortis – that bought Dutch bank ABN Amro last year. The deal was carried out during the height of the merger and acquisition boom. The bank said its recapitalisation will lift its Tier 1 capital ratio – a key measure of a bank’s financial strength – to more than 8 per cent. RBS said it will make asset disposals to generate £4 billion of core Tier 1 capital net of tax. “It was the [RBS] Board’s declared intention to rebuild our Tier 1 capital to the middle to upper end of our historic range of 7% to 8% over a three year period, but in light of the current market environment, this level and timing are considered no longer appropriate,” said Sir Tom McKillop, RBS chairman. Among its businesses is Coutt’s, the private banking group headquartered in London’s West End district. RBS said it intended to dispose of some of its business assets to repair its finances but the statement made no reference to Coutts. Coutts declined to comment when contacted by WealthBriefing. “The Board has identified for possible whole or partial disposal RBS Insurance and other smaller assets which are not central to the powerful UK and international banking franchises that RBS has built….In addition, RBS envisages continuing reduction of the capital demands of certain business lines, including global banking & markets, through active management of its balance sheet,” the statement said.