So farewell Stephen Hester, the chief executive of beleaguered RBS, who is to shoulder his shovel and head for the sunset later this year.
Last week’s surprise announcement that the boss brought in to turn around the 81% publicly-owned giant so crippled by the economic crisis of 2008 that it had to rely on the taxpayer to the tune of £45 billion to save itself from collapse was on his way has brought a new round of speculation about what went on behind the scenes, who pressured who, and when we might all get our money back.
But the fact we’re having the conversation at all is testament to the efforts of Hester, a man who surely can’t have enjoyed a very tough job very much over the last five years.
And let’s not forget the scale of the mucking-out job which had been facing the chief exec in his own particular Augean stables.
Since he took over to mop up the mess in late 2008, RBS has had a torrid time. In the last five years the bank has lost many, many billions, and set aside more to cover the cost of its restructuring activity.
About a trillion has been removed from the balance sheet, hundreds of millions have been written down in provisions for the legacy PPI and interest rate swap mis-selling common to many banks and for technology glitches which stopped customers accessing their money, and the bank was fined £390m for its role in the fixing of inter-bank lending rate Libor.
The bank’s investment arm, the bit some politicians have sought to characterise as the problem “casino” bank, has been significantly reduced in size the culling of some 2,000 posts was announced the day after Hester revealed his hand.
Insurer Direct Line is in the throes of being hived off as a separate entity to meet European Commission demands, while the Williams & Glyn’s name also looks set to make a high street return through another share issue following the collapse of Santander’s bid for 316 Natwest and RBS branches.
Most recently, we have heard that some 10% of RBS’ UK branches will close as the group seeks to downsize its own property portfolio.
And all this work has been carried out in the full glare of the headlines.
What might otherwise have slipped down the news agenda has topped the bulletins because each and every one of us is an investor, and the perils of RBS are symptomatic of the whole economy’s fragile, stuttering path out of the mire.
Now, touch wood, the bank is starting to make a profit again.
RBS posted pre-tax profits of £826m during the three months to the end of March. The performance marked the lender’s first quarterly profit since 2011, and a £3bn turnaround on the £2.2bn loss booked for the final period of 2012 and showed there’s a core bank beginning to operate in the way it should once more.
Hester has also boasted of a £20bn funding pot waiting to be lent and here’s the key to the right propositions.
And, though it still sits some way behind the UK Government’s 500p break-even figure, RBS’ share price is starting to head in the right direction.
Today, an influential Westminster commission is calling for radical plans to split the bank into “good” and “bad” arms to be more fully considered.
Later, Chancellor George Osborne will outline his next steps for the privatisation of state-backed lenders RBS and Lloyds.
The latter’s stock is in much better shape, and it’s easy to see how pressure ahead of an election might make the political animal believe it a good idea to shift a few shares in an attempt to persuade the public that things are on the mend.
But Hester’s warning that a full disposal of publicly-owned stock in his bank would take a decade is one which should be heeded.
A cut-price, quick-win policy won’t hoodwink the taxpayer. Selling at a loss and short-changing us all would be a terrible mistake.