Bank boss vows better deal for customers

Stephen Hester told the Yorkshire Post that judging what constituted a reckless loan was still a "grey area".

Mr Hester said that he did not believe the Government would sell its shares in RBS – which last night announced plans to axe up to 500 investment banking jobs – until the Independent Commission on Banking (IBC) delivers its report. The IBC has until September 2011 to report back with its recommendations.

He also revealed that "he hadn't given any thought" about whether he would waive his bonus next year.

He said: "We are trying to steer a responsible way through that supports our customers, but does not support the ones where the lending wouldn't help them. It would endanger their business and the chances are we wouldn't get the money back."

Mr Hester, who was visiting Leeds on a fact-finding trip to meet RBS staff and business leaders, refused to be drawn into the debate about Business Secretary Vince Cable's controversial speech to the Liberal Democrat party conference. Mr Cable's speech attacked the "spivs and gamblers" making "fat fees" in the City.

Mr Hester said he was focusing on the recovery of RBS "on behalf of our customers, and the whole nation".

"If our shares become valuable again, that's the best thing we can do. It is most useful for me to get those things done and not participate in the knockabout of party conference politics."

He acknowledged that many commentators and politicians were concerned about the bonuses paid to some bankers

He said: "It's true that small parts of the banking industry are highly paid and, therefore, have visible issues in this regard which are the subject of reform.

"But we should remember that in the case, for example, of RBS, well over 90 per cent of our staff are ordinary people that you will meet in branches every day. They are trying to do their job well. We as a company are trying to do our job well while changing."

RBS, which is 83 per cent owned by the taxpayer, announced earlier this month that it planned to axe more than 1,000 jobs in Yorkshire as part of a nationwide cull of 3,500 roles. Now another 500 jobs are set to be cut.

However, Mr Hester said the RBS staff had done a "phenomenal job".

"Despite all of the distractions and disappointments around them, they have carried on serving their customers,'' he said. "Our customer numbers have increased, so that tells you that our staff are out there doing their jobs every day.

"We have had to institute big change in RBS to recover from the mistakes of the past. Our staff are working with us to make those changes happen, even though some of them create uncertainty and difficulties for themselves. I admire them greatly and they know I am in the trenches just as much as they are, working to create an RBS of which every one can be proud once again."

He continued: "From my point of view, the faster the Government sells (its shares), the better. I believe in the coming years the Government will sell shares.

"My guess is that until the banking commission reports, the Government may decide not to sell shares. I would hope as soon as possible thereafter a start is made.

"We can make RBS a valuable company. We can create a situation where other investors want to buy the Government's shares at a profit to them, and those are the things we are doing. Then it's over to the Government to decide at what point to take money out of RBS.

"RBS has both the money, the capital and the desire to support its customers well and we do, in fact, lend many tens of billions of pounds to UK businesses every year. I also accept that we can do it better, and that's why we're trying to change and reform the bank.

"There are people who accuse us of lending recklessly in the past, and think we lent to people we shouldn't have done. Now there are people who think we are not lending to people we should do."

YORKSHIRE LINK

The Royal Bank of Scotland Group's links with Yorkshire can be traced back to the 18th century, when the banking firm of Beckett & Co was established in Leeds.

RBS has around 7,000 Yorkshire-based employees. There are around 2,000 RBS pensioners living in Yorkshire and their pensions, combined with staff wages, put 200m into the local economy.

An RBS spokesman said the bank had helped to establish more than 10,000 small businesses in Yorkshire since 2009, which is equivalent to more than 15 a day.

RBS has more than 150 branches in Yorkshire, serving 194,000 business customers; 860,000 personal customers; and around 13,000 clubs

and societies.