Royal Bank of Scotland chief executive Stephen Hester is to step down from the group later this year, the bank announced today.
RBS said a new CEO will need time to prepare the bank for a return to private ownership and Mr Hester “was unable to make that open-ended commitment following five years in the job already”.
It said the search for a successor will start immediately.
Mr Hester will receive payment in lieu of notice of £1.6m representing 12 months pay and benefits. He will not receive a bonus for 2013.
Mr Hester said: “It has been nearly five years since I joined RBS after the bank was rescued by the Government. In that time we have reduced the bank’s balance sheet by nearly a trillion pounds, repaid hundreds of billions of taxpayer support, and removed the imminent threat that this bank’s size and complexity posed to the UK economy. All the while we supported 30 million customers every day to help them manage their finances.
“We are now in a position where the Government can begin to prepare for privatising RBS. While leading that process would be the end of an incredible chapter for me, ideally for the company it should be led by someone at the beginning of their journey.
“I will therefore step down at the end of this year to allow a new CEO to lead the group in this next stage.”
Mr Hester will continue to lead the business until December unless a successor is in post before then.
RBS chairman Philip Hampton said: “On behalf of the board I would like to thank Stephen for his leadership and dedication over the past five years. In the midst of a major crisis, he accepted the challenge of stabilising the bank, turning it around, and putting us in a position where we can begin to plan for returning the organisation to the private sector. His achievements have been considerable.
“We will continue Stephen’s work to remove the barriers to privatisation over the next year and continue to do everything possible to support the British economy. Stephen will be leaving RBS in a vastly improved position that many would have thought impossible five years ago.”