RBS shares plunge on going ex-rights-issue

ROYAL Bank of Scotland's shares fell 13.6 per cent, or 43.25p, to 276p yesterday as the stock went "ex-rights-issue".

The fall followed approval by shareholders on Wednesday of the bank's stock-market cash call.

Banking analysts said the cause for the dramatic fell was that on Wednesday the value of RBS shares included the right to buy further stocks under the rights issue, but yesterday the shares were trading without that right.

One said: "In layman's terms, it means that RBS was trading at the theoretical value the shares might have after the subscription date for the rights on 6 June."

Bryan Johnston, a director at Bell Lawrie brokers in Scotland, said: "We have been advising clients to take up the RBS rights.

"These major banks are not going to go bust, even if there are failures at the margins. It is really an investment in the economic fabric of the UK, even if there might be divi cuts in the short-term."