The choice of music said it all. Only a year ago directors sat in smug contentment as the rousing theme tune from Gladiator, the blockbuster film starring Russell Crowe, accompanied footage on a giant screen showing the global domination of their company.

This year, as shareholders filed into Royal Bank of Scotland's annual meeting in Edinburgh, the music was more subdued. A series of dignified classical tracks, tinged with melancholy, preceded the dimming of the lights and the formal commencement of business. If 2007 was all about hubris, then 2008 was the year of humility.

After announcing a £12 billion rights issue and a huge writedown of its assets, RBS directors had every right to expect a grilling from private shareholders, to add to some of the damning remarks that have come from institutional investors.

In the vast auditorium of the International Conference Centre, it was left to Sir Tom McKillop, the company's chairman, to try to strike a balance between genuine concern and a refusal to panic. For more than an hour, Sir Fred Goodwin, the chief executive, sat by his side without saying a word, occasionally looking up at his chairman but for the most part staring silently ahead.

Sir Tom spoke in measured tones, but there were dark rings under his eyes. “There are lessons to be learnt from what has happened and we are anxious to learn these lessons,” he reassured his audience, before speaking of the bank's humility - the H word again - and acknowledging that it was asking a great deal of shareholders.

On at least one occasion, words failed him completely. “Unfortunately the market has really ... stum!” he said, slapping one hand into the palm of the other. For a banker, it was probably the best assessment to date of the credit crunch.

One shareholder accused the company of “unbelievable bad management” and criticised it for a rights issue that was at a “ridiculously low” price. To applause and the odd murmur of “hear, hear”, another, John Steen, questioned the level of directors' pay: “You guys were paid as though you were superhuman and it is very clear that you are not.” Accusing the board of “legalised larceny of customers' and shareholders' money”, he added, to laughter: “In my view bonuses should be limited to the difference between a good holiday and one where you stay at home and do some work around the house.”

Fred Lawson, from Musselburgh, outside Edinburgh, told Sir Tom: “I am finding you just a little bit like PC Plod rearranging the deckchairs on the Titanic.”

When nearly an hour had passed and the chief executive had still not spoken, John Horowicz, another shareholder, told the chairman: “You are not in a happy position because all the gentlemen to the side of you are probably responsible for this mess that you have got into and are probably not going to speak at all.

“We do hope the company survives but we do hope that certain directors look at themselves in the mirror.”

When eventually Sir Fred did speak, there was an apologetic expression on his face as he defended the decision to ask shareholders for money. With sweat glistening on his forehead, he said: “It is a painful decision, it is an unwelcome decision, but I passionately believe that it is the right decision.”

Yet although the directors faced tough questions, there were no explicit calls for heads to roll and it seems that, in Edinburgh, at least, pride at the achievements of RBS remains undimmed. To loud applause, Sir Tom countered suggestions from one shareholder that he was a “pharmacist” who knew nothing about banking. “With humility, I suggest that I do know a bit about it,” he said.

There was the usual slow-clapping at long-winded questions and at least one elderly shareholder raised concerns about the choice of biscuits available in the foyer. On the pavement outside, about 20 students demonstrated against RBS's funding of oil companies. “RBS take some action, stop funding oil extraction,” they chanted.

Inside, however, by far the biggest applause was saved for Ray Donnelly, who spoke of his pride as a Scot at watching the transformation of RBS over the past decade. He said: “Today is not a great day for the bank, but I think it is also not a day for jumping to conclusions. This is the fourth-biggest bank in the world. My God, where is the appreciation of that by the people of Scotland?

“The name Scotland' is in the title, the world headquarters are here in this city. What you have achieved over ten years takes my breath away and I think you [the directors] are entitled to the support and gratitude of every shareholder for that.”

Sir Fred was “one of the finest bankers of his generation or any other generation”, he said, before adding as an afterthought: “I think he could do with a new tailor, but that is neither here nor there.”

Crisis? What crisis?

At the RBS annual meeting last year, The Times tried in vain to find a single shareholder who had a bad word to say about Sir Fred Goodwin. At a time when the bank was trying to gatecrash Barclays’ agreed takeover of ABN Amro — a purchase that many blame for its present predicament — one man spoke for many when he said: “I back Fred Goodwin to make the right decision until the cows come home. Look at his record; it’s immense.”

Yesterday shareholders expressed disappointment at RBS’s change in fortunes, but most held back from calling for Sir Fred to resign. “I think they tried to outdo Barclays, that was the problem,” Thomas McWhirter, 82, a retired GP from Edinburgh, said. “But we’re in a big enough mess without changing horses.”

Alex Forall, 80, from Liberton, Edinburgh, said: “RBS didn’t get itself into this mess, the mess was because of the American market. This isn’t about bad management, like the Northern Rock crisis.”

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