Even so, some shareholders were suspicious that Sir Tom owed his position mainly to his Scottish roots. RBS's share price did not improve. “Fred got rather frustrated. He heard the institutions were much happier but the rating didn't move,” says one person who knows the bank well.

As RBS attempted to maintain its growth rate without making acquisitions, investment banking was playing an increasingly important role. The bank became a leader in financing private equity buy-outs and lent heavily for commercial property deals. In the US, Greenwich started bundling together securities into structures known as collateralised debt obligations. Unlike other investment banks, which rewarded senior staff with large amounts of restricted stock, RBS continued to pay big cash bonuses.

In the three years to June 2007, the bank's balance sheet doubled to more than ￡1,000bn. However, a strong credit rating and large deposit bases in Britain and the US meant there were few concerns about funding its growth. If anything, the feeling was that RBS was lagging behind rivals such as Barclays. During a strategy meeting held at the new head office in June 2006, some board members questioned whether the bank was being sufficiently ambitious. “None of the investors or non-executive directors ever said ‘slow down',” one executive recalls. “If anything they said, ‘go faster'.”