The bank was "over-stretched, over-leveraged, over-exposed, and under-powered" when the financial crisis hit, he told shareholders.
The new team led by Stephen Hester had a turnround challenge that was "unique" in its difficulty, the chairman said, implicitly supporting his chief's £963,000 bonus, while repeating his "personal regret" at failing to anticipate the backlash that forced Mr Hester to forgo it.
Half way through the five-year rescue plan RBS can boast major improvements in liquidity and capital, and what Sir Philip called a "quiet revolution in our approach to risk". Even the share price will now look better – but only thanks to a one-for-10 consolidation approved yesterday which will see RBS once again trading above 200p.
But the shadow of that 200p rights issue four years ago, which has damaged so many shareholders and employees, continued to haunt the annual meeting at Gogarburn, scene of the triumphant approval of the ABN Amro acquisition in 2007.
Sir Philip admitted a restoration of that value was "unlikely in my lifetime and for some time beyond".
The restoration of healthy levels of business lending looks equally unlikely, and is potentially the biggest brake on UK recovery.
The bank's uncompromising stance on derivative selling to small businesses, meanwhile, cannot hide the fact that large numbers of businesses sold these products by banks are now weighed down by an extra burden – and are unlikely to forget about it.