Very shabby: Verdict on Stephen Hester's treatment by RBS

Exit of banker who nursed RBS back to health shocks and perplexes investors

The City was last night reeling at Stephen Hester's departure from Royal Bank of Scotland amid widespread praise for his work there.

Many seemed perplexed that Mr Hester should be disposed of when he was in an ideal position to launch the float. Several described his treatment as "shabby".

One senior banker from a rival UK lender pointed out that Mr Hester had the best contacts with international investors to lead the company back on to the stock market: "It does appear odd that Hester has been pushed over the side at this stage. His whole background is in investment banking, so who better to have started the privatisation? Also he has been involved in roadshows to the Middle and Far East. How are those sovereign wealth funds going to read this?"

Others queued up to defend Mr Hester's achievements in cleaning up RBS's disastrous balance sheet. He has managed to dispose of vast swaths of the toxic debt he inherited in the investment banking side of the business while also keeping the retail arm healthy, they said.

Robert Talbut, chief investment officer at Royal London Asset Management and head of the Association of British Insurers' influential investment committee, said: "I think history will be a lot kinder to Stephen Hester than perhaps some current commentators think. He took over RBS in a distressed situation and has nursed it back to reasonable financial health."

A senior executive at a rival bank to RBS said: "He has done a terrific job for RBS and the taxpayer. Who could believe at the height of the financial crisis that we would be talking about floating the bank this year? People forget, he was not part of the crisis in banking, he was brought in clear it up."

He added that Mr Hester would now be able to earn more elsewhere as an expert in turning businesses around, given his achievements both at RBS and Abbey National.

Some bankers reported that there had been rumours that Mr Hester might not have been prepared to make a long enough commitment to stay with the business post-float.

"There has been speculation that he wants to make some 'serious money' before reaching retirement age," said one.

The manner of his departure also led to questions, with one senior banker saying: "The City will want to know more. Did he fall out with the Chancellor? In particular, does his pay-off include a gagging clause?"

David Buik, the City commentator, declared: "Whether he was shoved or resigned, I think he was scurrilously treated. Hester's job was work in progress. The balance sheet has been reduced from £2.2 trillion to £1.4 trillion, assets have been disposed of and there is a healthier outlook. There is no case for RBS to be privatised or split. It is far too early in the recovery process.

"Whoever takes over will need to be a man of steel and not one who panders to politicians."

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
musicOfficial chart could be moved to accommodate Friday international release day
Sport
Wes Brown is sent-off
football
News
i100
Sport
Italy celebrate scoring their second try
six nations
Sport
Glenn Murray celebrates scoring against West Ham
footballWest Ham 1 Crystal Palace 3
Arts and Entertainment
Drake continues to tease ahead of the release of his new album
music
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?