STEPHEN Hester’s naivety was self-evident as the Royal Bank of Scotland boss spoke for the first time about forgoing his £963,000 bonus because of a political and public outcry.
Both the Yorkshireman, and also the bank’s directors, should have realised the furore that this would cause, given how Mr Hester is already the recipient of a £1.2m salary at a bank that required a £45bn taxpayer-funded bailout.
Despite this cash injection, the bank is still losing money, jobs are being sacrificed and past excesses blamed for the scale of the credit crunch and slump.
Yet, in many respects, this scandal is not of Mr Hester’s making – he was headhunted by the last government and Alistair Darling, the then Chancellor, admits that insufficient attention was paid to potentially toxic issues like bonuses.
And it is also important that the public’s understandable anger over bonuses does not detract from the key objective – the restructuring of British banking and the RBS returning to profitability so the Exchequer can be repaid.
By all accounts, Mr Hester is regarded as the best man for the job. He also likened his task to defusing “the biggest timebomb in history in terms of bank balance sheets”.
However this process would not have been helped if Mr Hester had shown some personal indulgence and walked away from RBS at the height of the bonus furore; it would only have derailed the restructuring process.
That said, he needs to be careful in his use of terminology. He said yesterday that the £45bn has been “lost”. It has not been. It has been used to underwrite bad loans and investments.
Mr Hester’s challenge is to ensure that the Royal Bank of Scotland is in a position to repay every last penny. And, by then, his bonus will be merited.