Nathan Bostock in running to replace Stephen Hester at RBS

He was recently announced as the bank's new finance director

Ladbrokes have made Nathan Bostock the odds on favourite to take on the toughest job in banking by replacing Stephen Hester as the boss of Royal Bank of Scotland.

Mr Bostock was hired from Santander to be RBS’s head of restructuring and risk in 2009 and was recently announced as the new finance director.

He had been seen as the potential long term successor to Mr Hester, whose departure was announced last night.

Ladbrokes rates Mr Bostock as a 1-2 chance in the race to run the bank, although hiring him would represent a risk of the promotion being seen as too early and he would potentially require a long run in to establish credibility with the City ahead of privatisation plans being finalised.

Standard Chartered’s respected finance director Richard Meddings is second favourite at 4-1 with Rory Cullinan who has been dealing with Royal Bank’s “non core” division of bad assets, on the same price.

National Australia Bank Group CEO Cameron Clyne is the only other runner with single figure odds at 6-1.

Those who think Sir Mervyn King will cancel retirement plans to fill the vacancy will be paid at 500-1 if he ends up being the unlikely successor to Mr Hester while former Barclays boss Bob Diamond has been made a 250-1 shot to come back across the Atlantic.

Alex Donohue from Ladbrokes said: "Bostock is installed as an early front runner in the race to replace Hester. According to the betting at this stage it would be an upset were anyone else were to beat him to it."