Hester: RBS is near to making a full recovery

Tim Wallace
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RBS could reward its investors with dividend payments soon, chief executive Stephen Hester said yesterday, telling investors the bank is well on the way to recovery.

But the chief executive also warned that it will take “a lot of money” to rectify past mistakes.

RBS is under investigation for Libor fixing, which could see it fined, while the bank has also set aside more than £1bn to clean up payment protection insurance (PPI) mis-selling claims.

“RBS is nearing the point of a recovered bank and well on the way to ‘good’,” he told the Bank of America Merrill Lynch conference.

“The restructuring phase should be largely complete by end 2013.”

Part of the restructuring sees the bank cut costs in its markets and international business – it hopes to cut 3,800 jobs in its investment banking arm by the end of next year.

Despite the gloomy economic outlook and tough regulatory developments, Hester hopes to restart dividend payments after 2013, see the share price recover and start to plan out the majority-state owned bank’s privatisation.

But in addition to turning the businesses headline performance around, Hester also wants to “address conduct issues” in the next year.

That means he wants the bank to be a “good citizen,” a broad cultural aim that encompasses “employment, taxes, dividends, shareholder value and community engagement”.