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| RBS shares down on political interference fears as Hester quits | RBS shares down on political interference fears as Hester quits |
| (about 3 hours later) | |
| RBS has seen its share price fall amid speculation of political influence in Stephen Hester's departure. | RBS has seen its share price fall amid speculation of political influence in Stephen Hester's departure. |
| But when asked if there was pressure put on Mr Hester to leave by the prime minister or chancellor, David Cameron's official spokesman said: "I wouldn't put it in those terms at all." | But when asked if there was pressure put on Mr Hester to leave by the prime minister or chancellor, David Cameron's official spokesman said: "I wouldn't put it in those terms at all." |
| RBS has also said it would cut another 2,000 jobs within 18 months, taking the number lost since 2008 to 41,000. | RBS has also said it would cut another 2,000 jobs within 18 months, taking the number lost since 2008 to 41,000. |
| The cuts represent a 20% reduction in staff working in its investment arm. | The cuts represent a 20% reduction in staff working in its investment arm. |
| RBS shares closed down 3.3% in London, having fallen 7.5% in early trading. | |
| "The manner of Stephen Hester's departure is deeply unsatisfactory. Despite persistent speculation over whether Stephen would resign, it was not his decision to leave," said Investec's Ian Gordon. | "The manner of Stephen Hester's departure is deeply unsatisfactory. Despite persistent speculation over whether Stephen would resign, it was not his decision to leave," said Investec's Ian Gordon. |
| "Officially, no front-runner to succeed him has been identified. If true, we believe that it is negligent. If untrue, then it may constitute market abuse," added Mr Gordon. | "Officially, no front-runner to succeed him has been identified. If true, we believe that it is negligent. If untrue, then it may constitute market abuse," added Mr Gordon. |
| Shore Capital's Gary Greenwood said that Mr Hester's departure was a mistake, and because the bank would struggle to find a replacement, it was advising investors to sell their RBS shares. | Shore Capital's Gary Greenwood said that Mr Hester's departure was a mistake, and because the bank would struggle to find a replacement, it was advising investors to sell their RBS shares. |
| "We believe Mr Hester has done an excellent job in guiding the company towards safer waters following its near death experience in 2008," said Mr Greenwood. | "We believe Mr Hester has done an excellent job in guiding the company towards safer waters following its near death experience in 2008," said Mr Greenwood. |
| "Overall, we think this announcement increases the uncertainty around the shares and potentially delays further any return of the bank to private ownership," he added. | "Overall, we think this announcement increases the uncertainty around the shares and potentially delays further any return of the bank to private ownership," he added. |
| Back from the brink | Back from the brink |
| In a memo sent to staff about his departure, Mr Hester said: "Nothing about this decision was easy, but I can see that as we head towards a potential privatisation, (his departure) now provides a window for the company to put in place a chief executive that can give fresh energy to the challenge of leading RBS through the next phase." | In a memo sent to staff about his departure, Mr Hester said: "Nothing about this decision was easy, but I can see that as we head towards a potential privatisation, (his departure) now provides a window for the company to put in place a chief executive that can give fresh energy to the challenge of leading RBS through the next phase." |
| There has been some speculation that Mr Hester's departure may have been triggered by disagreements between him and Mr Osborne. | There has been some speculation that Mr Hester's departure may have been triggered by disagreements between him and Mr Osborne. |
| In a statement to the House of Commons, Economic Secretary to the Treasury, Sajid Javid said that Mr Hester should be congratulated on what he has achieved at RBS. | In a statement to the House of Commons, Economic Secretary to the Treasury, Sajid Javid said that Mr Hester should be congratulated on what he has achieved at RBS. |
| "When Stephen Hester took over, the bank was on the edge of collapse with a broken culture and posed a huge risk to financial stability. It had been bailed out by the British taxpayer at a cost of over £45bn." | "When Stephen Hester took over, the bank was on the edge of collapse with a broken culture and posed a huge risk to financial stability. It had been bailed out by the British taxpayer at a cost of over £45bn." |
| "Steven Hester brought it back from the brink and since then he has worked hard to make RBS a safer and a stronger bank, better able to support its customers," added Mr Javid. | "Steven Hester brought it back from the brink and since then he has worked hard to make RBS a safer and a stronger bank, better able to support its customers," added Mr Javid. |
| He also told the House of Commons that Stephen Hester had only received one bonus out of a possible five during his tenure. He added that he expected the RBS boss's leaving package to be a third of the maximum he was entitled to in the contract that was agreed under the previous Labour government. | He also told the House of Commons that Stephen Hester had only received one bonus out of a possible five during his tenure. He added that he expected the RBS boss's leaving package to be a third of the maximum he was entitled to in the contract that was agreed under the previous Labour government. |
| 'Orderly succession' | 'Orderly succession' |
| Shadow treasury minister Chris Leslie asked about the role that George Osborne had played in Mr Hester's departure, saying: "When did the chancellor set out to the chairman and the board his desire that Stephen Hester should go?" | Shadow treasury minister Chris Leslie asked about the role that George Osborne had played in Mr Hester's departure, saying: "When did the chancellor set out to the chairman and the board his desire that Stephen Hester should go?" |
| Mr Javid replied that the chancellor had not been directly involved, and that the decision was one made by RBS and its board. | Mr Javid replied that the chancellor had not been directly involved, and that the decision was one made by RBS and its board. |
| In a statement, RBS said an "orderly succession" would allow the new chief executive to oversee the re-privatisation of the bank and lead it "in the years that follow". | In a statement, RBS said an "orderly succession" would allow the new chief executive to oversee the re-privatisation of the bank and lead it "in the years that follow". |
| It said Mr Hester "was unable to make that open-ended commitment". | It said Mr Hester "was unable to make that open-ended commitment". |
| Private sector return | Private sector return |
| RBS chairman Sir Philip Hampton said a new chief executive would need to be in place by early next year if the bank was to begin its return to private ownership at the end of 2014. | RBS chairman Sir Philip Hampton said a new chief executive would need to be in place by early next year if the bank was to begin its return to private ownership at the end of 2014. |
| "The acceleration of considering succession for a chief executive role arises largely from the Treasury's determination... where it can be returned to the private sector by the end of 2014," he said. | "The acceleration of considering succession for a chief executive role arises largely from the Treasury's determination... where it can be returned to the private sector by the end of 2014," he said. |
| Mr Hester led the large-scale restructuring of RBS following its near collapse in 2008 at the height of the financial crisis. | Mr Hester led the large-scale restructuring of RBS following its near collapse in 2008 at the height of the financial crisis. |