THE public act of contrition by Royal Bank of Scotland chairman Sir Tom McKillop at yesterday's shareholder meeting to approve the government recapitalisation sounded heartfelt.

Paraphrased, it could be summed up as: "We did what we thought was best at each point since early 1997, but global market circumstances changed too rapidly for us and the ABN Amro acquisition has been unhelpful in the current trading backdrop."

This is not the same thing as saying the ABN acquisition was a mistake. And the outgoing Royal chief executive, Sir Fred Goodwin, who also said sorry to shareholders yesterday, has not gone that far, either.

But McKillop, on more than one occasion now, has virtually said in penitential neon that the deal was a bridge too far for a bank that had grown massively – both organically and by acquisition – in the previous decade. The chairman, who is to retire at next spring's AGM, has also all but admitted that the RBS consortium overpaid for the assets.

McKillop makes the fair point that most things are easier with hindsight. But, still in that vein of fairness, it is not the whole story here.

Well before the financial crisis engulfed the world and a terrible ugliness was born in banking, more than one or two City analysts had been saying RBS was under-capitalised to handle its business. One even said the Royal was the worst-capitalised bank in Europe.

Sir Fred and the rest of the RBS board, as was their prerogative, had disputed this view of the bank being under- capitalised for a long while. Right until a multi-billion-pound rights issue that proved to be an outrider for an embarrassing government bailout.

In retrospect, it was RBS's previous great decade of growth and profits that probably gave the board the confidence that they could face down the City sceptics.

Massive profits, big increases in the dividend, every year – what is your problem? But the sceptics were proved right.

Maybe if there was no global financial firestorm RBS would have ridden its strategy (and luck?) successfully, and never found its capital base wanting.

But there was, and it did.

AGIVEN in the pub and general leisure industry is that London and the south-east of England are more resilient to economic downturns than most regions.

That supposition could be put to the test as the financial crisis and economic recession lead to a shedding of many City of London jobs and belts are tightened.

SMALL BUT BEAUTIFUL

Rising sales as Protherics applies for US licence

HALF-YEAR revenue rose 16 per cent at drug developer and bid target Protherics, which also narrowed losses for the period.

Revenues for the six months to 30 September jumped to £17.2 million from £14.8m a year earlier, with the strong dollar helping underlying revenue grow 10 per cent. The interim pre-tax loss was cut to £5m from £6.1m.

A decrease in net cash of £9.6m was in line with expectations, providing a cash position of £28.1m, down from £46.9m last time.

Protherics said its takeover by life sciences company BTG was expected to be completed on 4 December. BTG has offered 0.291 of its shares for every Protherics share held, in a deal that values Protherics at about £157m.

In a separate statement, Proterics said it has started the submission of a rolling Biologics Licence Application for Voraxaze with the Food and Drug Administration in the US. This marketing application is being made for the interventional use of Voraxaze for the rapid reduction of methotrexate (MTX) in patients who have toxic levels of MTX due to impaired renal function. Voraxaze contains an enzyme that breaks down MTX.

A possible bleak straw in the leisure sector wind came yesterday from Young & Co, a pubs group whose 222 outlets are placed firmly in London and the south-east.

Young's first-half profits proved resilient to the worsening economic conditions, with profits in the six months to the end of September up 9 per cent.

But in the seven weeks since the period-end like-for-like sales at Young's 122 managed pubs fell 3.3 per cent in what the company called "extremely challenging" market conditions.

The group said explicitly that such difficult trading had been made worse by the unprecedented events in the financial markets.

And, in employment terms, the economy of London and the south-east of England is undoubtedly more tied up with the fortunes of the financial services industry than other regions of the UK.

In that sense, as major City jobs bloodletting continues to be either feared or confirmed, it is likely that people will feel less like pushing the boat out in pubs and restaurants than they once did, as well as avoiding property and retail purchases.

As Young's-follower Mark Brumby at broker Blue Oar Securities said yesterday: "Something pretty grisly happened to the UK and global economy six or eight weeks ago and the impact is still being acutely felt."

Saying the south-east of England will be far from immune to recession is not the same thing as saying it is going to be a white-collar recession.

Announcements across all industries, from banking and housebuilding to engineering and telecoms, suggest office workers and industrial workers will all be affected.

But I suspect we will see more tales of corporate gloom from southern England as the downturn bites, to show that images of its relative affluent resilience are largely mythical.

RUMOUR OF THE DAY

Ebro gets sweet with British Sugar

SPANISH foods group Ebro Puleva is to initiate exclusive talks with British Sugar over the sale of its Azucarera sugar subsidiary, a company source has claimed. "The board decided yesterday to authorise exclusive talks with British Sugar," the source said. He added: "We think the offer will meet our expectations."

British Sugar is owned by Associated British Foods.

Ebro Puleva put its sugar business up for sale in May following attempts by European sugar refiners to consolidate in the wake of European Union sugar subsidy reforms in 2006.

Ibersecurities analysts believe Ebro Puleva could fetch between 500 million and 550m for Azucarera, which accounts for about a quarter of Ebro's income and posted sales of 434.6m in the nine months to September.