RBS chief Stephen Hester has taken the unusual step of emailing every staff member at the bank to rally morale after its recent political battering.
His email reveals that the total cost of restructuring the bank so far has been £38bn from write-downs and restructuring charges, which he says are “ahead of schedule” and “a measure of our recovery success” in overhauling the failed behemoth.
The losses have been offset by £33bn in earnings, he assures staff, which has “allowed us to afford to take the costs of ‘clean up’ from our risky inheritance”.
He hints that if the bank had not generated such profits, it would have been unable to crystallise losses on its bad assets, leaving them all still on balance sheet.
But the note also voices Hester’s concern that the toxic political environment could hinder the bank’s progress.
“There is no doubt that our position in the spotlight makes the job harder. And we can’t know how much damage that will do to RBS or the interests of those we serve, whether as customers or shareholders,” Hester writes.
“We should try to be strong, to do our jobs, to deal with facts not fears,” he says.
Dear Colleagues,
… the purpose of this message is simply to give you my perspective, and it is this:
RBS is full of good people, doing their best across a multiple set of challenges…
… RBS is still in its loss making phase … over the last 3 years we have generated over £33bn of pre-impairment profits from improving our Core businesses... This has allowed us to afford to take the costs of “clean up” from our risky inheritance, in loan losses, disposal costs and restructuring charges (£38bn so far)…
… On a personal note, thank you to those many people who have given me messages of support in recent days.
It's much appreciated.
Best,
Extracts from Hester’s letter to staff
