James Moore: Reshaped RBS draws rave reviews – but is far from 'recovered'

Outlook Optimism and Royal Bank of Scotland have been mutually exclusive terms for so long that yesterday's statements from chief executive Stephen Hester had the feeling of coming from a parallel universe where his unlamented predecessor Fred Goodwin had remained an accountant.

After all, RBS has been through a long and sorry summer made hot only by the tempers of those unfortunate enough to hold the accounts that stopped working for several weeks thanks to antiquated computer systems that made Stonehenge look modern.

And yet there Mr Hester was at a banking conference baldly stating that RBS was "close to" becoming a "recovered bank". Should we all be knocking on the doors of the pharmacists who supplied him with the drugs he must have been on?

But hang on a second. Hard for those caught up in the account-blocking debacle to believe it (or to believe anything from a bank that made their lives miserable verging on impossible) but there are grounds for thinking that Mr Hester hasn't taken complete leave of his senses.

Behind the scenes RBS has been steadily normalising a business that was not just bad, but bizarre. Flights off fancy such as its aircraft leasing company, chain of pubs and various up market hotels have been sold off. There's still a Singaporean Casino in there, but not for long.

Meanwhile, after initially clinging on to the bank's grandiose investment banking operation like a gorilla with a Fyffes box in the middle of a banana famine, Mr Hester has bowed to the inevitable and swung the axe. What's more, the reshaped investment bank is garnering rave reviews in the City. An outbreak of sanity? Well, something close to it.

It might take a bit of sweet talking with the regulators but it shouldn't be too long before RBS is out of the Government's (bad) asset protection scheme as well.

Trouble is RBS is still haunted by the sins of the past. Mr Hester recognises that. "We have to all deal with the issues of the past and try and prevent them recurring and that will take a long time and, sadly, a lot of money," he said. Well, he's a banker after all. But the really sad part is the damage they have inflicted on so many people.

It isn't yet clear how much money compensating them is going to cost but, with writs pouring in, the best guess is "a lot".

And that suggests Mr Hester's optimism might be just a little premature: RBS will only really be considered as a "recovered bank" when it is able to consistently report positive earnings which aren't blown away by one-offs as a result of all those past misdeeds. Until the legacy of Mr Goodwin's misrule is finally and definitively purged.

That looks some way off. So does any chance of taxpayers making a return on the vast investment they have made into this still listing Titanic of the banking industry.

But given the year the bank and he has had, perhaps Mr Hester can be forgiven his optimism. Everyone needs to smile once in a while.

News
peopleTop Gear presenter and all-round controversialist is at it again
Life & Style
techHow a 'grey brick' took over the world of portable gaming
Sport
Aaron Ramsey celebrates after opening the scoring in Arsenal's win over Hull `
sport
News
peopleActress speaks out against historic sexual assault claims, saying things have 'gone quite far now'

VIDEO
News
Coren Mitchell, who is the daughter of the late broadcaster Alan Coren and is married to comedian David Mitchell, produced a hand to make poker history at the 98th EPT main event.
peopleJournalist and TV presenter becomes first ever two-time winner of the European Poker Tour
Arts & Entertainment
A stranger calls: Martin Freeman in ‘Fargo’
tvReview: New 10-part series brims with characters and stories

Life & Style
Guests enjoy food and cocktail parings by Chefs Jimmy Bannos, Jimmy Bannos Jr, Daniel Rose and Mindy Segal with mixologists Josh King and Alex Gara at Bounty & Barrel: A Jack Daniel's Single Barrel Dinner Series at Heaven on Seven on April 9, 2014 in Chicago, Illinois.
food + drinkSprinkle Palcohol 'on almost any dish' for 'an extra kick' firm says...
Arts & Entertainment
Shaun Evans as Endeavour interviews a prisoner as he tries to get to the bottom of a police cover up
tvReview: Second series comes to close with startling tale of police corruption and child abuse
Arts & Entertainment
Schwarzenegger winning Mr. Universe 1969
arts + entsCan you guess the celebrity from these British Pathe News clips?
News
politicsLabour launches the 'completely hollow' Easter Clegg
Sport
Luis Suarez celebrates after scoring in Liverpool's 3-2 win over Norwich
sport Another hurdle is out of the way for Brendan Rodgers' side
News
Portrait of Queen Elizabeth-II by David Bailey which has been released to mark her 88th birthday
peoplePortrait released to mark monarch's 88th birthday
Arts & Entertainment
The star of the sitcom ‘Miranda’ is hugely popular with mainstream audiences
TVMiranda Hart lined up for ‘Generation Game’ revival
Life & Style
The writer, Gerda Saunders, with her mother, who also suffered with dementia before her death
healthGerda Saunders on the most formidable effect of her dementia
Arts & Entertainment
Last, but by no means least, is Tommy Cooper and the fez. This style of hat became a permanent trademark of his act.
comedyNot Like That, Like This centres on alleged domestic abuse
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Database Team Lead ( Leadership, Sybase, Computer Science)

Negotiable: Harrington Starr: Database Team Lead ( Leadership, Sybase, Compute...

C#.NET Delphi SQL Developer (C#,DELPHI,SQL)

£40000 - £50000 per annum + Bonus+Benefits+Package: Harrington Starr: C#.NET D...

VB.NET SQL Junior-Mid Level Developer (VB.NET,SQL,Excellent com

£25000 - £35000 per annum + Bonus+Benefits+Package: Harrington Starr: VB.NET S...

Trade Support, Application Support, Operations Analyst, CRM MS

£45000 - £55000 per annum + Bonus and Benefits: Harrington Starr: Trade Suppor...

Day In a Page

Rubin ‘Hurricane’ Carter: The man who could have been champion of the world - and the Bob Dylan song that immortalised him

The man who could have been champion of the world

Rubin ‘Hurricane’ Carter and the Bob Dylan song that immortalised him
Didn’t she do well?

Didn’t she do well?

Miranda Hart lined up for ‘Generation Game’ revival
The Middle East we must confront in the future will be a Mafiastan ruled by money

The Middle East we must confront in the future will be a Mafiastan ruled by money

In Iraq, mafiosi already run almost the entire oil output of the south of the country
Before they were famous

Before they were famous

Can you guess the celebrity from these British Pathe News clips?
Martin Freeman’s casting in Fargo is genius

Martin Freeman’s casting in Fargo is a stroke of genius

Series is brimming with characters and stories all its own
How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players