By Catherine Henderson
Stephen Hester, RBS Chief Executive is angry and wants us all to know about it. After the European Union yesterday insisted on the sales of RBS’s most profitable division, Hester has reacted strongly saying “The enforced break-up of Royal Bank of Scotland will make it more difficult for taxpaers to get their money back and will not help consumers.”
The Government have a very different take on the situation with Alistair Darling insisting the reforms represent a good deal for the tax payer.
Both Lloyds Banking Group and RBS are being forced towards major restructuring which will result in a sell off of 900 branches and RBS losing its money making insurance arm, which includes the Churchill and Direct Line brands.
The result of the restructure will mean a wipe-out of all RBS English branches, something that would never have been dreamed of for what was once the world’s biggest bank with iconic status. The pay-off from the restructure for RBS will be another state funded cash injection totally $2.5 billion. This will take the British taxpayer’s stake in RBS to 84%.
Talking about the EU’s rulings Hester says they neither “improve competition nor improve our ability to pay back the shareholder, that’s to say the taxpayer.”
Hester is in an increasingly difficult position, protecting RBS, responding to the new power of the Government and respecting the public mood which at a time of steep economic downturn is in no mood for petulant banks.