One school of thought believes Stephen Hester is a civil servant, because he runs an institution which is 82 per cent owned by the taxpayer. That same school believes he should be paid at senior civil service rates and not receive huge bonuses. Some even think a civil servant should have got the job.
That was always unlikely. The Financial Services Authority has to approve every senior banking appointment. It was never likely to give the go-ahead for the Permanent Secretary in the Office of Paperclips and Staplers to run RBS.
Mr Hester, 51, had the full banking pedigree when he was appointed in November 2008. He joined the London arm of Swiss investment bank Credit Suisse after graduating from Oxford and became its youngest ever managing director, aged 35.
Ten years ago he left to become finance director of Abbey National. He was key to a major turnaround of that business and its sale for £8bn to Spain's Banco Santander.
Colleagues said he was brilliant at simplifying complex issues and very clear on choosing the right strategic moves. That track record put him at the top of Gordon Brown and Alistair Darling's shopping list when they were looking for a replacement for Sir Fred Goodwin after the Government's £45bn bailout of RBS.
Mr Hester is now just over half-way through the five-year strategic plan he outlined for RBS in 2009. By his own admission he has hit many of his targets but missed others. He has moved the bank from making the UK's biggest-ever corporate loss of £24.1bn to a modest profit of £1.2bn in the first nine months of 2011. He has sold huge chunks of the bank, including the 318 branches which the EU required under state aid rules, and next year will sell the insurance business, which includes Direct Line and Columbus.
Those are the headline deals, but RBS has actually got rid of £600bn of non-core assets since 2008 – much of that dodgy financial instruments or bad property loans. He has also boosted the amount of spare capital in the bank. That is the money it could draw on in any future crisis rather than having to be bailed out.
Under Mr Hester, RBS has cut around 30,000 jobs, cutting costs by tens of millions. He now has to wind down the bank's investment banking arm, which will remove more risk and cost more jobs.
Critics point to the fall in the RBS share price – down 40 per cent in 2011 – and the fact the taxpayer stake is now worth only half the amount of money we injected.
It is also likely RBS failed to meet the targets set for lending to small and medium-sized business under the Government's Project Merlin last year. The bank will argue that it is hard to lend to businesses which do not want to borrow.
In the City there is widespread support for Mr Hester and not a little sympathy. After all he will certainly be the worst-paid UK bank boss this year. There will be even more support if he can get the share price up from its current 27p to the 50p which is the average the Government paid for its stake.Reuse content