CEO of RBS to leave the bank
Stephen Hester, the Chief Executive Officer of the Royal Bank of Scotland is to step down after more than four years at the helm. RBS is 81 percent owned by the British government after a taking £45.5bn bailout in 2008, which resulted in Hester being offered the job after the departure of Fred Goodwin. The bailout was the largest of the banking bailouts in the UK, which totalled £66bn of the tax payers money.
The general consensus amongst analysts is that Mr Hester has done a good job of “steadying the ship”, however the bank will be better off after his departure due to a shift in attitude towards lending to small business’. It was just last month that the CEO said the government would get a decent return on the shareholding that it acquired during the crisis if they began to slowly sell the stock. The share price fell by 0.6 percent today, closing at 325.6 pence per share. However, that is some way off the 407 pence price that the government would be seeking for their total holding so they can break even on the entire deal.
Mr Hester has twice waived end of year bonuses due to public and political pressure. The first was in January of last year when he passed up on a £1m personal windfall and a feat he repeated after the NatWest computer error which rendered millions of bank accounts inaccessible for more than a week.
Chancellor of the Exchequer, George Osborne, made a brief statement upon hearing the news and said “I want to commend Stephen Hester for everything he has done to make this turnaround possible… Having brought RBS back from the brink, now is the time to move on from the rescue phase to focus on RBS being a U.K. bank that provides greater support to the British economy”.
Who will lead that the bank into its new era is yet to be decided but is widely expected to be settled in the very near future. The chairman of the Royal Bank of Scotland, Philip Hampton, will be looking to appoint a CEO in the coming weeks and has said they will look to both external and internal candidates for Hester’s replacement.