By Chris Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
“Don’t cry for me, RBS” could certainly be the lament being sung by Stephen Hester, outgoing CEO of bailed out Royal Bank of Scotland, after the shock announcement that he will have left the bank by the end of this year. CEOs of banks come and go; however, the government stake in RBS makes this CEO particularly important.
There are two things that make Hester’s departure fascinating: firstly, the fact that the RBS board along with the Treasury have concentrated on how a new leader is needed to privatise the bank. Secondly, the fact that Hester doesn’t seem to want to go.
By Matt Scuffham, UK Banking Correspondent.
The government should hand most of its shares in Royal Bank of Scotland and Lloyds Banking Group to the public, an influential political think tank says, in what would be the country’s biggest privatisation.
It's just not fair. Those beastly banks are snatching the bread from our mouths, chorus three of London's mid-cap broking houses. "Taxpayer supported banks" (do they by any chance mean Lloyds and Royal Bank of Scotland?) are strong-arming the clients of Panmure Gordon, Numis and Evolution into steering lucrative rights issue underwriting their way.
Shares in Lloyds Banking Group are worth 150 pence apiece, according to the analysts from Royal Bank of Scotland, who think the shares offer "a compelling restructuring opportunity" around today's 95 pence.
Controversy and running RBS go hand in hand. Stephen Hester replaced Fred Goodwin as chief executive of RBS and is now in hot water himself over his incentive pay deal. The chief executive of the state-controlled bank could be paid 9.6 million pounds over three years if the share price (currently 44p) reaches 70p. However, he seems to have so little faith in the shares reaching that level that he has offloaded 1,264,565 shares since last November at prices between 28.5p and 48p, yielding just over 464,000 pounds.