Impossible job was too hard for Hester to finish

Elizabeth Fournier

WHEN Stephen Hester joined RBS in late 2008, he must have believed that the mountain in front of him was worth climbing. After years of grafting at Credit Suisse, Abbey National and then as chief executive of developer British Land, a return to banking must have felt like the final push towards the summit – five years to turn around a train wreck of a bank and hand it back to the private sector a leaner, cleaner and above all profitable machine.

RBS may have been in the gutter, but Hester was looking at the stars.

After a four-year stint at British Land – where he led a successful turnaround but saw the firm’s share gains all-but erased by the property crash – Hester looked like the man for the job. He came in all guns blazing, announcing on his first conference calls that “There are no sacred cows”.

The teacher’s son from Yorkshire even looked the part. His stint at British Land may have been enough to distance him from the financial industry in the eyes of an angry public, but Hester was a banker through and through – with the Oxford estate, ski chalet and hunting habit to prove it.

The early signs looked good. Hester played the part of the contrite head of a bailed-out bank well, sweeping out the bad egg bankers and swiftly identifying which part of RBS were worth holding onto. But even for a man with excess energy – he recently told the Financial Times he runs around Holland Park every morning at 6am – the politics of the job seem to have worn him down.

Hamstrung by the government’s 82 per cent stake in the bank and at increasing odds with his board – led by headstrong former Sainsbury’s chair Sir Philip Hampton – the past 18 months have been an uphill struggle.

Since giving up his bonus last year, Hester’s path to privatisation has been dogged with hurdles – a failed branch sale to Santander, the £390m fine for its role in the Libor scandal, then the IT fiasco last summer.

Things haven’t been easy behind the scenes either. Hester’s marriage to first wife Barbara Abt – a fellow banker who shared his love of hunting – broke down in 2010 (a split he says had nothing to do with his day job), and he has since married Suzy Neubert, a wealth manager at JO Hambro.

The toughest job in banking may have taken its toll on Hester, but at just 52 years old it’s hard to imagine his career is over for good.

Though he leaves RBS with a payoff large enough to sustain his gardening passion for years, such a swift departure is likely to leave the steely Yorkshireman with a sense of unfinished business. As he said in a recent interview: “I hate not winning. I hate it.”


Nathan Bostock
In the process of being promoted to finance director, Bostock has run RBS’ restructuring operations since 2009.

Ana Botin
Botin runs Santander UK, but may be out of favour as her bank pulled out of a major deal to buy 316 RBS branches.

Richard Meddings
Meddings has overseen six years of record profits since becoming Standard Chartered’s finance head in 2006.

Rory Cullinan
Cullinan heads RBS’ non-core division and so knows exactly how much more work RBS needs to do to focus in on UK retail lending.