Hester urges RBS staff: Prove thecritics wrong

Stephen Hester, the chief executive of Royal Bank of Scotland, has come out fighting to protect his and the taxpayer-owned bank's reputation as the political and public furore over City bonuses continued.

In his first statement since he turned down the £963,000 share bonus which the RBS board awarded him for 2011, he launched a rallying cry to the bank's staff, saying: "The best way to deal with it is to prove the critics wrong."

He said: "There is no doubt our position in the spotlight makes the job harder. And we can't know how much damage that will do to RBS or the interests of those we serve, whether as customers or shareholders."

Labour yesterday called for a ban on large bonuses in bailed-out banks except for "genuinely exceptional performance", arguing that a "culture of excessive bonuses" is damaging the economy. The taxpayer owns 82 per cent of RBS and is sitting on a loss of £22bn from the £45bn bailout.

Sir Philip Hampton, the chairman of RBS, strongly defended Mr Hester last week and it is clear that the bank and its board feel the need to continue stating their case as tension over fat-cat pay and bonuses grows.

Mr Hester told staff that what "we" need to do is "to be purposeful, calm, and do our jobs to the best of our ability. And have confidence and pride in what we have done and what we can accomplish."

He added: "We should try to be strong, to do our jobs, to deal with facts not fears. I, and we, have the full support of Philip and the board in this endeavour."

Following the removal of Fred Goodwin's knighthood last week, Mr Hester said: "I am acutely conscious that the way our company has been in the media and political spotlight this last 10 days is discomforting to say the least.

"And while it has been personalised in different ways, whether on myself or my predecessor, many have felt a broader impact on RBS of the uncertainty and criticism."