Rollercoaster RBS: Now chairman could follow Hester to the exit during bank's next boardroom shake-up
The chairman of Royal Bank of Scotland is expected to follow chief executive Stephen Hester to the exit in the next twist in the Government-led boardroom putsch at the taxpayer-backed bank.
Sir Philip Hampton told Bloomberg TV yesterday that ‘when we have a new CEO, other aspects of boardroom succession will be addressed’, implying that he may leave once a replacement for Hester is found.
And the troubled banking giant - the biggest faller on the FTSE 100 yesterday, initially losing more than 6 per cent - will be ordered to lend billions more to struggling businesses.
rallied later - ending the day 10.6p or 3.26 per cent lower at 315p - but £650million was wiped off the bank's value, and City concern has been stoked by speculation over Hampton's possible exit.
Boardroom coup: Sir Philip Hampton could also go in a clear out that has wiped 3 per cent off the sharesThe Treasury denied Labour claims that Hester had been removed - after George Osborne staged a ‘coup’ - to pave the way for a pre-election ‘fire sale’ of RBS, which is 81 per cent owned by the taxpayer after its £45billion bailout.
But Treasury minister Sajid Javid told MPs that small business lending would become ‘even more prominent in RBS’s strategy’.
Last night David Cameron told the financial website Bloomberg that voters were more interested in getting their money back than a quick return to the private sector.
More... ALEX BRUMMER: Vacancies on Lombard Street after the government creates a political problem for itself CITY FOCUS: It's 'chaos' as politicians and City clash over RBS future‘It will take time, because this is a bank that is still healing,’ the Prime Minister said.
‘As for when we get it back into the private sector, I just have two very simple concerns – one is we must make sure this bank contributes to the recovery of the UK economy.
'Secondly, people put their money in. I want them to get their money out.’
Out: RBS CEO Stephen Hester was removed in a 'coup' staged by George OsborneInvestors said Hampton had played down the idea of his imminent departure in conversations with them yesterday, but added that his position was made difficult by his failure to protect Hester from Treasury attacks, both recently and last year over his remuneration.
Hester locked horns with George Osborne on a number of issues including the level of the bank’s lending to small firms, whether or not to keep the US arm Citizens, and the scale of the investment bank.
A demand from the Treasury to cut another £28billion of assets from the investment bank balance sheet was one of the final straws.
Possible successors to Hampton include Penny Hughes, who currently chairs the bank’s pay committee and Paul Tucker, the deputy governor of the Bank of England. The search will be more difficult as Lloyds is also looking for a new chairman to replace Sir Win Bischoff.
City headhunter Anna Mann is leading the hunt for an executive to take over Hester’s mantle. Her shortlist is likely to include Nathan Bostock, who has recently been appointed as RBS finance director, though Hampton is said to be lukewarm about internal candidates. Other possibilities are Lloyds deputy chairman David Roberts, along with National Australia Bank supremo Cameron Clyne.
Richard Meddings, finance director of Standard Chartered, has been strongly tipped for the job. However the Treasury is understood to have reservations because of his association with the bank’s troubles last year in the US, where it was fined for sanctions-busting in its dealings with Iran. The Parliamentary Commission on Banking Culture and Standards, due to report shortly, is to recommend the Government looks at splitting RBS into a good bank/bad bank, which would delay the privatisation process.
There is also unease over RBS’s Irish subsidiary, Ulster Bank, which operates mainly in the Republic of Ireland. It is responsible for heavy losses and insiders believe it may take a generation to resolve its problems.
