RBS shares are getting slammed by the news of Stephen Hester's retirement and the announcement of 2,000 jobs cuts at the bank. It seems more likely that markets care about the first job loss than those others (at least if analyst notes are anything to go on). Hester is a well respected professional, and will be hard to replace.
Analysts at Espírito Santo Investment Bank have maintained a sell rating on the bank given the news, saying that the "political wrangling [which led to Hester's announcement] has significantly impacted the franchise, especially in RBS’s markets business".
Shareholders are right to be worried, and the government is the biggest going. The state currently has an 82 per cent share in the bank, and crippling the stock value could waylay efforts to return the bank to private hands.
In today's City A.M., columnist Mark Kleinman describes Hester's ousting as an "assassination" akin to the "drive-by shooting" of former boss Fred Goodwin.
The eagerness of politicians to micromanage RBS is doing shares no good, and only massages the egos of those who think they know better than the banking professionals.
It is politically difficult to accept some of the roles that RBS performs - essentially all but high street lending - have been helping to restore the asset, but chancellor George Osborne seems determined to sabotage the company.
Rather than now hestitating, the case for getting the bank into public hands is now more important than ever; clearly the government can not be trusted with it.
Instead of continuing to interfere, Osborne should look to proposals put forward by the Centre for Policy Studies and Policy Exchange to distribute RBS shares to millions of UK citizens.
Hester had to leave to help sale of RBS, apparently. He goes, shares fall. Make it happen..— kit juckes (@kitjuckes) June 13, 2013