EDINBURGH – Sir Fred Goodwin, CEO until this October of the Royal Bank of Scotland Group plc, was the world’s worst banker, writes Newsweek’s Daniel Gross.

Goodwin “aced every requirement for a hubristic CEO,” Gross contends in an online report, beginning with “carrying off mergers and acquisitions and calling them growth” and proceding to carrying out an “ill-advised, history-making, massive merger precisely at the top.”

After taking the helm of RBS in 2000, Goodwin led the Citizens Financial Group Inc. parent on a $140 billion spending spree that included the $10.3 billion purchase of the Cleveland-based Charter One Financial Inc. and peaked with the Edinburgh bank’s $90 billion acquisition last November, together with Spain’s Banco Santander SA and Belgium’s Fortis, of ABN Amro Holding NV.

He was knighted in 2004 – largely, for his role in growing RBS into a global leader. By June this year, the bank was Europe’s largest lender and biggest backer of leveraged buyouts. But as the bank grew, its reserves declined, until this fall, RBS had to accept government aid via the U.K. bank bailout scheme. (READ MORE)

“The folly was to go ahead with ABN Amro – to outbid Barclays and then, when the storm clouds were gathering on the horizon, to go ahead with it,” Stephen Cockburn, managing director of London-based fund manager The Investment Company Plc, told Bloomberg News last week. “It was megalomania on the part of the management.”

Meanwhile, Gross writes, Goodwin also had RBS “trading in funky securities,” until by June this year, the bank’s derivative assets exceeded its net deposits; “building an expensive, self-indulgent new headquarters,” a $500 million facility in Stamford, Conn., for the U.S. investment banking and trading operation that recently began cutting staff, that is due to open next year “telling shareholders you don’t need more capital – and then raising it”; and, overall, “messing things up so badly the bank has to be nationalized,” as it was last Friday, when the U.K. government boosted its stake in RBS to 57.9 percent. (READ MORE)

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