RBS Boss Stephen Hester Vows To Stay Put
The chief executive of Royal Bank of Scotland (RBS) has moved to allay concerns that he may quit the taxpayer-backed lender by pledging to stay in the job for "years to come".
I understand that Stephen Hester, who was appointed to run the bank following its £45bn bailout in 2008, told senior colleagues on Wednesday that he intended to remain at RBS and that they should ignore forecasts of his imminent exit.
Mr Hester's future has been the subject of frequent speculation in the wake of annual rows over his bonuses, which he has waived amid intense political pressure for the last two years.
Mr Hester made the remarks at a conference attended by RBS's top 300 executives at the bank's Edinburgh headquarters.
Insiders said that the RBS chief and the heads of its main business units had set out plans for the bank which aimed to move it on from the restructuring process that has dominated the last four-and-a-half years.
Mr Hester told colleagues that RBS was targeting a deal with the Government by the end of next year, through which the bank would buy out a special instrument that prevents it paying dividends to ordinary shareholders.
The resolution of the Dividend Access Share issue is seen as a necessary milestone towards enabling the Government to begin selling its 82% stake in RBS.
Mr Hester is said to have become emotional at the end of the conference, when a colleague from the human resources department thanked him for his commitment to the transformation of RBS.
Executives from RBS' investment bank; Coutts, the wealth management arm; Citizens, its US retail bank; and UK retail operation also made presentations at the summit.
One attendant described the event as "an attempt to move forward" for the bank, which reported another multibillion pound loss last year.
Mr Hester is understood to have said that the bank's recent £390m Libor-rigging fine was likely to have been the last major regulatory failure for which it would face a heavy penalty.
Fines for a major IT systems failure last year and for breaching anti-money laundering regulations are expected to hit RBS in the coming months, although they are unlikely to be as large as the Libor penalty.
Sky News has also obtained a copy of an article written last month by Mr Hester for RBS's employee magazine, in which he lambasted the banking industry for breeding a culture in which product mis-selling became rampant.
"In recent times banking lost sight of the customer-compass that successfully guides the best companies across many industries. Banks eroded the founding principle of trust upon which the industry rests; losing the trust of customers, the trust of the public, regulators, and behind closed doors, losing the trust of our people. In any arena, trust is hard won and easily lost," he wrote.
"For RBS winning back its reputation will be a slow steady march through numerous changes and improvements; doing the right thing, at the right time for the right reason. Part of this is about strengthening our culture, but there is something oblique about enduring culture change: like the desire to obtain a high share price, it's rarely best achieved when it's the primary goal. For me the process starts and finishes with a focus on customers."
RBS declined to comment on Mr Hester's remarks at this week's management conference.