The chairman of Royal Bank of Scotland conceded under tough questioning from the bank's shareholders yesterday that he could not guarantee an end to the rash of "skeletons in the cupboard" which have plagued the taxpayer-funded bank over the last few years.
Sir Philip Hampton, the chairman of RBS, admitted that he had been "very disappointed" by the succession of scandals which have rocked the largely state-owned institution since it was bought out by the Government five years ago.
He referred to the £390m settlement the bank had to make for Libor rate fixing, the loss of a further £1.1bn from mis-selling and £175m spent on an IT fiasco, and said that while he did not see any major new problems looming, he could not be sure of that.
Sir Philip warned that there might be further job losses as the bank prepares for privatisation. While he did not give any indication of exactly when that sell-off might be, he did suggest that RBS might be returned to private hands in about 18 months, and that discussions with the Government about lifting the bar on dividends might start next year.
But it was past problems that dominated the meeting of angry RBS shareholders in the bank's Edinburgh headquarters yesterday.
Sir Philip admitted the past problems, but said he could not offer any guarantees that there were no further scandals to come. "If I made that assurance to you, the lawyers would take me out and skin me alive," he said.
He added: "It is disappointing how many skeletons have come out of the cupboard. These things are very disappointing. That is why we need to go through a significant period of culture change."
But he stated: "I think that we are through the worst of all of these things. There is not anything major on the horizon, but I might have made that statement to you two years ago before things that were not on the horizon appeared."
During an uncomfortable two-and-a-half-hour session, Sir Philip was berated by shareholders about a succession of issues from poor customer service to the font size used on bank statements.
But some of the toughest questions came on the pay levels for senior staff.
Kenneth Cramond, a shareholder, demanded that pay levels for all senior bank employees be frozen.
He said: "We have all heard about Libor and PPI and we have been told it is all down to past mistakes and excess, but £1bn has been paid out in bonuses in recent years. That's £1bn that could have gone into RBS and shared out among shareholders.
"The taxpayer will not tolerate it, and if you opened your eyes you would know it," he told Sir Philip.
And Mr Cramond asked: "If we are all in this together, how about executive pay being frozen? We cannot go along rewarding failure. Enough is enough."
Sir Philip argued that RBS had to exist in a market so had to pay its senior staff the going rate for the industry. "We have to live in a market. We still have to exist against commercial businesses and we need to be commercial ourselves," Sir Philip said. And he added: "We have been pretty tough … we have almost frozen basic pay for top people for a good while."
The bank said 99.3 per cent of its shareholders approved its pay resolution.
The chairman did deliver a thinly veiled warning that more jobs would be lost and more branches closed as RBS continues its restructuring.
He said: "We've got to have our branches where our customers are, not always where we have had them for decades. We have work to do over the coming years to get our business in the right shape to deliver these ambitions, and that could mean further impacts on employees."
RBS's chief executive, Stephen Hester, said outside the meeting that it was entirely up to the Government when it wanted to initiate discussions on lifting the block on shareholder dividends, but that could happen very soon.
"The Government could initiate that conversation at any time if they wanted to, and we would certainly be responsive to anything they did," Mr Hester said.
The chief executive stressed caution on immediate dividends, though, adding that he believed that an RBS dividend would be "more likely to be next year than this year".