PROFILE
The pleasant, slightly pudgy baby
face of Stephen Hester, the new
boss of Royal Bank of Scotland
(RBS), is deceptive. Hester has
to brutally axe thousands of jobs – possibly
more than 20,000 – across the entire
bank network as RBS retrenches across
the globe, undoing deals from their retail
and commercial banking operations in
an effort to slash costs. The new CEO of
RBS, which is now majority owned by the
British tax payer, is effectively reversing the
aggressive global acquisition strategy of
former boss Sir Fred Goodwin, still smarting
from his publicly shaming decision to keep
his £700,000 for life pension after running
RBS into near oblivion. Hester also has to
perform his new role in the full glare of an
unmerciful media who will be pounce at
the slightest gaff or whiff that the public
– still outraged about the level of some City
bonuses – are not getting value for money.
So, what sort of man would want to
take on such a challenge, especially when
the bank recently announced losses of
more that £24bn, the biggest loss in British
corporate history? More to the point, who is
Stephen Hester?
Physically big – Hester has successfully
trimmed his boxer’s build by two stone
recently – he’s naturally intellectually
confident and his grasp of detail is huge.
14 l Profiles
RBS’ new boss, Stephen Hester, has cancelled the
corporate jet and is close to sacking thousands in an effort to
put his bank back in the black. He reckons he has five years to
do the job. He also has the help of up to £25bn of taxpayers’
money to help him. With shamed Sir Fred Goodwin sidelined,
what are Hester’s chances of success?
Down But
Not Out
Born in 1960, the son of an Oxford
University don, he went to Oxford
University, leaving with a first class degree
in politics, philosophy and economics.
He is a man known for a cool, analytical
mind; he’s also known for his forensic
knowledge of the banking sector from both
sides – lender and borrower. Although his
last post at British Land was essentially
a property business, it also had many
banking clients. Hester originally climbed
the financial corporate ladder rapidly,
becoming Chief Financial Officer at Credit
Suisse First Boston by the time he was 35.
A stint at Abbey National (as it was then
known) as financial director followed where
he successfully sorted out a load of toxic
debt, before flogging the bank for £9bn to
Spanish Bank, Banco Santander.
Hester the action man
What he is widely admired for – which no
doubt will comfort the Government and
other investors – is that he has a strong
track record of clarity and action in times
of trouble. Clarity is linked to confidence,
something the City needs. He promptly
issued a profits warning when he moved
to Abbey with badly needed restructuring
following. His last job at property
investment company British Land was a
tenure widely admired for its prudence,
selling off almost £6bn worth of older
property and reducing debt levels; and
unlike many other property companies,
British Land remains on a sound financial
footing. Although John Ritblat, his British
Land predecessor, was a hugely forceful
personality, openness was not one of
Ritblat’s strengths. Hester, in comparison,
offers a lower key, softly spoken approach,
a style in keeping with the downbeat
recessionary times. He certainly broke
new ground at British Land by introducing
quarterly reporting – a boon for investors –
and flipped homes, dumping British Land’s
traditional historic Regent’s Park pile for a
more modern, anonymous building that was
considerably cheaper to run.
But the new boss of RBS, a fabulously
wealthy man by any standard thanks to
his many years in investment banking, will
need to muster all his communication,
intellectual and leadership skills to turn
RBS around. He is denied the luxury of
being able to re-structure the troubled
operation privately; he has to perform the
job not only in the glare of the media, but
also in front of government and disgruntled
shareholders – a constantly swiveling
audience, all demanding communication
in their own language. The government
certainly has their own politically driven
agenda, obviously, which want to see
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