The "highly ambitious" British Land chief executive was yesterday announced as Sir Fred Goodwin's replacement to lead RBS through the toughest period in its history.

Insiders said Yorkshire-educated Mr Hester, who joined RBS' board as a non-executive director less than a fortnight ago, stands out for his ruthless drive and determination.

RBS yesterday confirmed it is raising £20bn through the sale of ordinary and preference shares under the part nationalisation of the UK banking sector. The Government could end up with 57 per cent of the bank if investors do not buy into the capital raising.

"When we come out of this ... we will be a strong international bank with global operations, but they will have a different shape and balance in terms of risk profile and focus on the customer," said Mr Hester.

In August the bank said £5.9bn credit crunch writedowns wiped out half-year profits leaving a £692m pre-tax loss. With the summer's £12bn rights issue an all-but distant memory and more writedowns looming, Mr Hester said the bank will have "no sacred cows" regarding asset sales.

"We will make material changes to strategy," he said. "That will mean rebalancing towards lower risk and in doing that towards lower leverage."

Mr Hester was born in Ithaca in New York in 1960 where his father, a university chemistry professor, was based. The family moved back to the UK in the late 1960s and Mr Hester was educated at Easingwold Comprehensive in North Yorkshire before attending Oxford University.

The father-of-two spent 19 years at Credit Suisse First Boston, rising to become global head of its fixed income division. He joined Abbey National as chief financial officer in May 2002, then becoming chief operating officer, where he ruthlessly restructured the business.

Mr Hester joined British Land in November 2004 and his appointment as chief executive in 2007 took many by surprise. A property sector novice, he replaced Sir John Ritblat after winning his admiration during a chance trip to Venice. He doubled British Land's market value and prepared it for conversion to a real estate investment trust.

Sources said first and foremost "he sees himself as a businessman" and has long coveted a high-profile banking job. His role as non-executive deputy chairman of Northern Rock for the past six weeks was widely seen as a precursor to taking the helm at a big bank.

"This is certainly Stephen Hester's big chance, the one he has been waiting for," said an executive from one of Europe's biggest property share investors.

"He is highly, highly ambitious," said a banking source.

However, one banking analyst warned significant cost cutting could stem from Mr Hester's appointment. "In an ironic way he's got quite a reputation for being a cost cutter in a similar light to the man he replaces."