Sir Fred Goodwin will mark ten years at the top of the Royal Bank of Scotland (RBS) today, including eight as chief executive.

Celebratory drinks at one of Scotland's famous golf courses are unlikely, however. Sir Fred is not a networking-at-the-clubhouse kind of guy, having pointed out a long time ago that he has no time for “cynics, spectators or dead wood”.

Instead, he is likely to be thinking about Friday, when he delivers RBS's interim results.

Much is riding on the figures. In the past 12 months RBS has led a consortium that paid €72 billion for ABN Amro, raised £12 billion from shareholders, been hit by almost £8 billion in writedowns and fielded calls for Sir Fred's head.

Analysts are predicting a loss of as much as £1.2 billion for the first half.

If Sir Fred, 50, is to emerge unscathed, he must deliver good news about progress on the €2.3 billion (£1.8 billion) in synergies he promised to squeeze out of ABN by 2010.

He also needs some positive feedback on the bank's disposals programme, despite clearly struggling to offload its insurance business.

Getting the hoped-for £7 billion from Direct Line and Churchill brands would require RBS to sell the insurers at 12 times earnings, while most insurers trade at between six and seven times.

RBS needs £4 billion in net gains from disposals to push its equity Tier 1 capital ratio - a key measure of financial strength - above 6 per cent.

Shareholders have accused Sir Fred and his board of buying ABN at the top of the market last October, pushing the bank's capital ratio from just over 5 per cent at the end of 2006 to 4 per cent after the acquisition - just when regulators were becoming nervous about banks' ability to withstand the liquidity freeze and tightening their demands on capital cushions.

But Sir Fred's reputation, and his nickname Fred the Shred, rests on his ability to make deals work. NatWest, bought by RBS in 2000, is often quoted as a textbook integration.

Subsequent acquisitions, including Mellon and Charter One in the United States in 2001 and 2004, were less celebrated but far from disastrous.

His deals turned a regional British bank into a global brand; RBS is America's biggest foreign bank, a top three bank in India and is likely to see its Asia Pacific business contribute more than £1 billion to the coffers for the first time this year.

Despite continuing unrest at some investment houses over the huge rights issue, pragmatic shareholders still believe that Sir Fred is the best man for the job.

One said: “There's not a wealth of great bankers out there and we need someone to integrate ABN. If you bring someone else in, he can blame his predecessor. Fred has to make it work.”

They also acknowledge that being first and going large on the rights issue, which was followed by almost £9 billion in capital raising by less bold rivals, was the right strategy.

Surprisingly, shareholders remain ambivalent about the return RBS has provided in Sir Fred's eight years in charge. RBS stock, which hit a peak in February 2007 at 600p, underperformed the all-share index by 34 per cent over the period. Since the ABN deal completed on October 11, RBS has lost 55 per cent, closing up 3.5 per cent yesterday at 215p.

One shareholder said: “If you build a global bank you gain from diversity, so you have a lower cost of capital. But it depends how much you pay to diversify.”

Executives who have worked closely with Sir Fred insist, however, that his reputation as an overpaying deal-junkie and cost-cutter extraordinaire is unfair.

“The idea that he's someone who simply shrinks things doesn't stand up to the figures,” one admirer said.

Staff numbers at RBS have grown from 30,000 to 170,000 over the past ten years. “He likes a laugh and a chat but when he's got his business head on, he knows what he wants and goes after it,” another acquaintance said.

Investors admit that part of his unpopularity in the City stems from his refusal to “toady” to shareholders. “But he does come and see investors now rather than us going to him, so maybe he's mellowed,” a shareholder said.

Privately, RBS's chief executive has admitted that he has turned the ABN deal over and over in his mind, looking for the killer sign that he missed.

But the fact is, the acquisition was supported by 95 per cent of shareholders and may not have been available at a more opportune time in the financial cycle. He knows that he cannot change what he paid for the business, but he can control whether the synergies come off.

Analysts believe that if Sir Fred can hang on for another year or two, he should see his strategy vindicated.

“Diversifying internationally may well pay off in 2009 and 2010 when the Lloyds TSBs and HBOSs of this world are being slapped around by the UK market,” one analyst said.

Sources close to RBS said that the chief executive's fierce personal pride will not allow him to back down.

“If he delivers these synergies by 2010 and steers the ship through this storm, he might decide that that's the job done.” First, he must get through next Friday.

Banks manager

— Raised in Paisley, the son of an engineer. Studied law at Glasgow University before becoming an accountant with Touche Ross

— Appointed by the Government in 1990 to run Short Brothers, the largest industrial employer in Northern Ireland. Oversaw global liquidition of BCCI

— Hired by National Australia Bank in 1995, appointed deputy chief executive of Clydesdale Bank

— Joined Royal Bank of Scotland in 1998. Bought NatWest in 2000 in £22billion hostile takeover; beat synergy targets by £600 million

— Named Businessman of the Year in 2002 by Forbes magazine

— Became chairman of the Prince's Trust in 2003

— Bought Churchill, the insurer, in 2004 for £1.1billion

— Led consortium to buy 10percent of Bank of China for $3.1 billion in 2005

— Bought the Asian and wholesale businesses and global payments operations of ABN Amro for €10 billion

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