Royal Bank of Scotland boss to step down soon
Chief to receive £1.6 million when he leaves
[attach id="259820" size="medium"]Royal Bank of Scotland chief executive Stephen Hester. Photo: Reuters[/attach]
Royal Bank of Scotland boss Stephen Hester will step down later this year, after the bank’s board decided it wanted new leadership to oversee the sale of Britain’s majority stake in the bank, which could take years.
Hester said yesterday he would have liked to carry on at the helm for the start of sale of the government’s 81 per cent stake, which could take place before the next election in 2015.
However, the bank said the 52-year-old had been unable to make an open-ended commitment to remain as chief executive, having held the role for five years, and that the board believed a change at the top now would give the new CEO time to prepare for the government sale and lead it in the years following. Britain pumped £45.8 billion (€53.9 billion) into Royal Bank of Scotland (RBS) to keep it afloat during the 2008 financial crisis.
Finance Minister George Osborne is expected to say next week that the time is right for the government to start offloading its stakes in the country’s state-backed banks, with shares in rival Lloyds expected to be sold off first.
Hester praised for slashing risky assets, bank costs
Hester has been praised by the government and investors for restructuring RBS by slashing risky assets and costs, in a drive which he dubbed the “biggest turnaround in corporate history”.
RBS’s underlying profit nearly doubled to £3.5 billion (€4.1 m billion) last year, the highest since its bailout, although a £4.6 billion (€5.4 billion) change for losses on the value of its own debt drove it to a pre-tax loss of £5.2 billion (€6.1 billion)
One of RBS’s biggest 20 shareholders said Hester would be missed but his departure now was better than coming halfway through the sale of the government’s stake.
“If you’re going to go, you either wait until afterwards or you do it now,” the investor said.
The list of potential successors is likely to be short given the task of dealing with regulators and politicians. Richard Meddings, finance director at Standard Chartered, has been tipped as a potential successor.