Matthew Greenburgh and other investment bankers who engineered the catastrophic takeover deal that brought the Royal Bank of Scotland to its knees have received multi-million-pound bonuses for the disastrous transaction, it has emerged.
The man who led the team advising RBS in spearheading a £50 billion ($100 billion) takeover of Dutch rival ABN Amro, Matthew Greenburgh pocketed at least £5 million and possibly as much as £11 million, according to insiders.
Matthew Greenburgh, of US-headquartered investment bank Merrill Lynch, received the cash for acting as the main investment banking lieutenant of RBS chief Sir Fred Goodwin during the takeover. Greenburgh, 47, did not return calls yesterday.
RBS teamed up with Banco Santander and Fortis to clinch the takeover of ABN in 2007.
At the time, one member of the Merrill team boasted that the transaction would be “remembered for its historic significance in serving clients”.
But the bid was disastrous for RBS. The bank has now had to be rescued by the Government and the state now owns a controlling share.
Earlier this week, RBS said it would report a full-year loss which could hit £28 billion — the largest loss ever made by a British company —with £15 billion to £20 billion of the total related to the ABN Amro deal.
Even Gordon Brown has voiced his dismay at the situation. The Prime Minister admitted that “people have a right to be angry” at the “wrong investments” made by RBS while Sir Fred was chief executive.
It is believed that all members of the Merrill team that worked on the RBS deal received bonuses — albeit mostly smaller than Matthew Greenburgh’s.
But Matthew Greenburgh’s close colleague Andrea Orcel, whose title is given as Merrill’s “head of global origination”, is thought to have forgone his right to a bonus in respect of RBS’s takeover of ABN. Mr Orcel did not return calls.
Merrill Lynch has consistently declined to comment on bonuses paid to staff. But it confirmed that the people who worked on the RBS deal are still on the payroll.
News of the payout for Merrill’s “success” with the RBS deal comes after it emerged that the bank paid out billions in bonuses to executives just days before completing its life-saving sale to Bank of America. Crucially, the payments were made more than a month before they would have been made, had Merrill remained independent.
Merrill is itself in crisis — last week declaring record losses of £11 billion for the fourth quarter — and has been forced into the arms of Bank of America through a rescue takeover.
Bank of America has now been forced to seek a US government guarantee of £85 billion on potential losses on the toxic assets it inherited from Merrill.
John Thain, who took charge of Merrill only 13 months ago and was asked to stay with Bank of America after the takeover, left this week “by mutual agreement”. It emerged that he had spent £865,000 on a lavish makeover of his office at Merrill’s New York headquarters.
Halifax Bank of Scotland has given £2 million-worth of luxury holidays to its staff, despite the stricken bank having needed a £17 billion taxpayer-funded bailout from the Government
The giveaway for 1,000 bankers and mortgage advisers for hitting 2008 targets comes in the week that HBoS was taken over by the Lloyds TSB group.
HBoS had originally organised hundreds of expenses-paid trips in the Caribbean, New York and Toronto but fearing that details of the perk were about to leak out, Lloyds hastily cancelled the trips yesterday and instead gave the staff holiday vouchers.
This article, bylined Ian Fraser and Ben Laurance was published in The Daily Mail on 24 January 2009. Read the article on Mail Online