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Royal Bank of Scotland CEO Stephen Hester to stand down Royal Bank of Scotland CEO Stephen Hester to stand down
(35 minutes later)
Stephen Hester is to step down from his role as chief executive of Royal Bank of Scotland in December.Stephen Hester is to step down from his role as chief executive of Royal Bank of Scotland in December.
Mr Hester has been in the post since November 2008 and the search for his successor will start straight away. Mr Hester has been at the helm of the part-nationalised bank since 2008. The search for his successor will start immediately.
In a statement, RBS said: "The board believes an orderly succession process will give a new CEO time to prepare for the privatisation process and to lead the bank in the years that follow. RBS said an "orderly succession" would allow the new CEO to oversee the re-privatisation of the bank, and lead it "in the years that follow".
"Stephen was unable to make that open-ended commitment," it said. It said Mr Hester "was unable to make that open-ended commitment".
Mr Hester, who led the large-scale restructuring of RBS following its near collapse in 2008, will receive £1.6m in cash - equivalent to a year's salary. RBS is hoping to start selling shares to the private sector next year.
Mr Hester, who led the large-scale restructuring of RBS following its near collapse in 2008, will receive £1.6m in cash - equivalent to a year's salary - as part of his exit deal.
He will keep his long-term investment plan, currently worth £3m. The Treasury has capped his maximum entitlement from this plan at £4.2m.He will keep his long-term investment plan, currently worth £3m. The Treasury has capped his maximum entitlement from this plan at £4.2m.
'Bruising and difficult''Bruising and difficult'
RBS said it had made "huge progress in becoming a strong bank, with balance sheet and funding transformed and the business fundamentally reshaped". In a video statement released by RBS, Mr Hester expressed mixed feelings about his departure.
"Of course I'd like to have stayed as I feel I've been in the trenches with all of my people helping RBS to recover and privatisation would have been a fitting end to those endeavours," he said.
"But it has been a very bruising and difficult job so I certainly don't have to be prised away reluctantly."
The BBC's business editor Robert Peston said Mr Hester's departure was described by a Treasury official as by "mutual agreement".
RBS said it had made "huge progress" under Mr Hester, becoming "a strong bank, with balance sheet and funding transformed and the business fundamentally reshaped".
"[We are] now beginning to prepare for possible share sales by the UK government," it said."[We are] now beginning to prepare for possible share sales by the UK government," it said.
"Accordingly, both the board and Stephen agreed this provided a window to begin a transition of leadership.""Accordingly, both the board and Stephen agreed this provided a window to begin a transition of leadership."
Mr Hester said: "Of course I'd like to have stayed as I feel I've been in the trenches with all of my people helping RBS to recover and privatisation would have been a fitting end to those endeavours,
"But it has been a very bruising and difficult job so I certainly don't have to be prised away reluctantly."
RBS chairman Philip Hampton, who will oversee the hunt for Mr Hester's successor, said: "On behalf of the Board, I would like to thank Stephen for his leadership and dedication.
"In the midst of a major crisis, he accepted the challenge of stabilising the bank, turning it around, and putting us in a position where we can begin to plan for returning the organisation to the private sector.
"Stephen will be leaving RBS in a vastly improved position that many would have thought impossible five years ago."
Chancellor George Osborne praised Hester's work, saying: "Stephen Hester has made an important contribution to Britain's recovery from the financial crisis.Chancellor George Osborne praised Hester's work, saying: "Stephen Hester has made an important contribution to Britain's recovery from the financial crisis.
"Having brought RBS back from the brink, now is the time to move on from the rescue phase to focus on RBS being a UK bank that provides greater support to the British economy.""Having brought RBS back from the brink, now is the time to move on from the rescue phase to focus on RBS being a UK bank that provides greater support to the British economy."
Last month RBS said it would be ready to return to the private sector next year and expected the government to start selling shares from the middle of 2014.
The government still owns an 81% stake in the bank after it invested tens of billions of pounds to rescue it from collapse in 2008.
In February, RBS announced its fifth straight annual loss since being taken over by the government.