Fred A. Goodwin

Chief executive officer, Royal Bank of Scotland

Nationality: British.

Born: 1959, in Paisley, United Kingdom.

Family: Married; children: two.

Career: Rosyth Royal Dockyard, 1985–1987, contract manager; Touche Ross, dates unknown, partner; Bank of Credit and Commerce International, dates unknown, chief operating officer; National Australia Bank, dates unknown, chief executive officer and director; Royal Bank of Scotland, 1998–2000, group chief executive; 2000–, CEO.

Awards: Named Global Businessman of the Year, Forbes , 2002; named one of the Top Ten UK Computer Sciences Corporation Business Leaders of the Year, 2003; knighthood, bestowed by Queen Elizabeth II of England, 2004.

Address: Royal Bank of Scotland, 36 Saint Andrew, Edinburgh EH2 2AD, Scotland;

■ Frederick ("Fred") A. Goodwin joined the Royal Bank of Scotland in 1998. The young, aggressive businessman operated like a European Pac-Man, gobbling up smaller banks and entities along the path to the top, feeding on their assets and spitting out their excess. By 2004 the Royal Bank of Scotland (RBS) commanded a global market value of $70 billion, outpacing J. P. Morgan Chase, Deutsche Bank, Barclays, and UBS.


The tall, lanky, boyish-looking Goodwin was born in Paisley, Scotland, on the Clyde River west of Glasgow. An accountant by profession, Goodwin had early business experiences that extended across a wide range of industry sectors. His first professional challenge was the reorganization of contract management for the Rosyth Royal Dockyard from 1985 to 1987, and he was subsequently retained to advise the incoming contractor.

Fred A. Goodwin. © Elder Neville/Corbis SYGMA.
Fred A. Goodwin. ©
Elder Neville/Corbis SYGMA

In 1990 Goodwin was appointed by the British government to prepare Short Brothers, Northern Ireland's largest industrial employer, for privatization. He later became an accounting partner with Touche Ross and chief operating officer of the worldwide liquidation of the Bank of Credit and Commerce International.

Goodwin was savvy in restructuring financial mergers and their attendant overlapping costs. He combined this talent with forward momentum to achieve tighter, fitter organizations, better prepared to take on growth and progress. Still in an accounting role, Goodwin helped the Clydesdale Bank (the British arm of the National Australia Bank) acquire the Yorkshire Bank. This became the stepping stone for him to enter the world of financial services. National Australia Bank noticed him and the work he did with Clydesdale and invited him to head British banking operations, which, in addition to the Clydesdale and Yorkshire Banks, included the National Irish and the Northern Banks. Goodwin later recounted, in an article for Forbes magazine, that he had accepted the job based on his "five-second rule," which dictates that one's first instinct is the right one (April 15, 2002). In fact, Goodwin, who was honored by Forbes as Global Businessman of the Year in December 2002, revealed that he often relied on such fast-paced visceral reactions to help him make his final decisions.


True to form, Goodwin developed a reputation with National Australia Bank for cutting costs and trimming excess. Before long, he became known as "Fred the Shred" for his austere and often sweeping measures at the bank. In 1998 the Royal Bank of Scotland invited him to join their ranks as CEO. Moving from Glasgow to Edinburgh was as symbolic as it was factual: he had crossed the great divide from west to east, from simple to stuffy. Because he had been serving as chairman of the Prince's Trust in Scotland, the transition was easier for those who had not yet attached a face or bona fide name to "Fred the Shred."

When Goodwin became CEO, RBS was a modest, midsized, provincial bank. He immediately set about to build up the bank by investing heavily in smaller acquisitions. A signature trend of RBS was that it did not replace its logo on its new acquisitions, often permitting them to operate independently. But behind the lines, Fred the Shred shrewdly strategized for integration.

In March 2002 National Westminster Bank (NatWest) became the crown jewel in RBS's holdings, and it was a hostile takeover. Twice the size of RBS, NatWest was acquired for $32 billion and catapulted the names of the Royal Bank of Scotland and Goodwin into banking history. According to Forbes Global (April 15, 2002), the acquisition was "brilliantly strategized" by Goodwin, who trumped his competition (Bank of Scotland) with a carefully constructed integration plan that impressed investors and produced great results, including a 27 percent increase in RBS's profits. Unfortunately, Goodwin had to cut 18,000 jobs and $1.4 billion in costs in the merger, but his dedication to his investors won the day. Other Goodwin acquisitions included Mellon Financial (from RBS's Citizens Financial Group in the United States) in 2001; the Swiss private Bank von Ernst in 2003; and First Active, an Irish mortgage lender, which merged with RBS-owned Ulster Bank in 2003.


Goodwin was staunchly loyal to his bank customers, making money for them at any cost. Known as blunt to the point of brutality, he was opinionated and viscerally judgmental, and he did not suffer fools gladly. While his acquisitions made a lot of money for his clients, he often alienated merger employees and labor unions for his cost-slashing tactics. The duality of his reputation—hero to many, Machiavelli to others—did not bother him. His commitment to his investors remained his primary focus.


Having gained what he saw as the most desirable European acquisitions, Goodwin looked westward toward the future. Royal already owned the Citizens Financial Group in the United States, but in May 2004 Goodwin approved Citizen's $10.5 billion acquisition of Ohio-based Charter One Financial. This move resulted in a $128 billion increase in RBS's U.S. assets, making it the largest European-based bank in the United States. In a conference call with journalists, Goodwin conceded that he planned more U.S. takeovers in the future.

See also entry on Royal Bank of Scotland Group plc in International Directory of Company Histories .

sources for further information

Christy, John H., "The A List: Pro-Choice," Forbes Global , April 15, 2002, .

O'Neill, Tina-Marie, "It's All Right for Fred," Sunday Business Post , October 19, 2003, .

Robinson, Karina, "Right, Said Fred, Both of Us Together," Banker , April 2, 2001.

"Royal Bank Eyes Growth," Daily Herald (UK), May 6, 2004.

Syre, Steven, "Royal Ambition," Boston Globe , May 6, 2004.

Wapples, John, and Rob Ballantyne, "RBS Steps Up Its Invasion of US Banking," May 9, 2004,,,9063-1105149,00.html .

—Lauri R. Harding

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