Skip to main content

RBS CEO Hester: We can't afford to give up on banks

July 3, 2012 -- Updated 1147 GMT (1947 HKT)
Stephen Hester, chief executive of Royal Bank of Scotland, pictured in 2011: The public has a right to be angry with banks.
Stephen Hester, chief executive of Royal Bank of Scotland, pictured in 2011: The public has a right to be angry with banks.
STORY HIGHLIGHTS
  • Hester: We had a massive task on our hands when I returned to banking sector
  • Banks must move away from being masters, to being servants of their customers, he says
  • He says RBS has gone through the biggest restructuring of its kind in history
  • Hester: While public is right to be angry with banks, no one can afford to give up on them

Editor's note: Stephen Hester wrote this open letter to the Daily Mirror on the banking crisis.

(CNN) -- When I returned to the banking sector three-and-a-half years ago, we knew we had a massive task on our hands.

It required both physical and cultural change of a fundamental kind.

The news of the last week has underlined the changes that are needed and which are painfully making their way through the system.

At its heart is moving banks away from being "masters of the universe" to being, once again, the servants of their customers.

Customers are right to be angry about mis-selling cases with retail or small business customers and about serious ethical issues uncovered in the Libor cases that seem likely to involve many banks.

This last week too, a systems failure at my own bank led to unacceptable inconvenience for our customers.

At RBS we have our share of problems to correct from the past and just as we are working hard at putting our financial weaknesses behind us, so too must we cement cultural change.

We are determined to put things right. But also, our systems problem reminded everyone just how important banks are to modern society.

We heard difficult stories about the way our customers' lives were disrupted when the basic services they relied on were temporarily not available.

World's biggest banks from China

We will have a full investigation into the causes of the problems and do all we can to ensure they do not happen again.

That realisation of how important banking is makes the anger banks are facing all the more troubling.

About one million British people work in financial services. It is a vital industry to us all.

The vast majority of our staff are good people, working hard, who care about our customers.

When I returned to banking I found an industry that had expanded incredibly fast in the years leading up to the financial crisis.

It was also an industry that had seemingly gone from success to success and frankly got too proud of itself and overconfident.

My focus was on how to mend RBS and the way we serve those who rely on us.

We knew in 2009 that the recovery would take five years. Looked at today, that might have been an underestimate. I said then that we needed both physical and cultural change.

Job number one is for everyone at RBS to put our customers' interests first.

Along with that is the need to deal with any issues where we got it wrong, especially any of impropriety, and show that we would take them very seriously.

And we have also sought to build a new culture of accountability that was lacking across the banking sector in the run-up to the crisis.

The second job was to physically change RBS. We needed to make it much smaller.

We have shed hundreds of billions of pounds from our balance sheet in what has been the biggest restructuring of its kind in history.

And as we have become smaller, our focus on our home UK market -- especially high street banking -- has grown in importance.

Our physical change needed to reinforce our cultural change.

That is why we have spent the past three years getting out of the activities our customers don't need and putting our resources back into the services they value and rely on.

Our work at RBS is far from finished.

Even now, as our systems problems show, we are encountering additional improvements we need to make.

The scale of the problems of the past means that in the weeks and months ahead we will need to continue to explain what went wrong and what we are doing to fix things.

But I hope that readers of this paper can agree with me that the changes we are making are vital.

And I hope you will also agree that while you are right to be angry with the banking sector, none of us can afford to give up on it.

This article first appeared in the Daily Mirror on Tuesday.

ADVERTISEMENT
Part of complete coverage on
August 27, 2013 -- Updated 1943 GMT (0343 HKT)
German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
September 4, 2013 -- Updated 1528 GMT (2328 HKT)
The G20 is held in Russia but, amid disagreements over Syria, can anything be done? John Defterios investigates.
July 10, 2013 -- Updated 1502 GMT (2302 HKT)
Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
June 7, 2013 -- Updated 1750 GMT (0150 HKT)
The euro club has suffered major shockwaves but its newest member has emerged as an economic star. What;s behind Estonia's success?
May 29, 2013 -- Updated 1323 GMT (2123 HKT)
The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
May 14, 2013 -- Updated 1326 GMT (2126 HKT)
The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.
The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
May 27, 2013 -- Updated 0256 GMT (1056 HKT)
Europe's competitiveness is threatened as manufacturing companies scrambling to find enough skilled engineers.
July 10, 2013 -- Updated 1502 GMT (2302 HKT)
Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
May 2, 2013 -- Updated 1044 GMT (1844 HKT)
As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
April 26, 2013 -- Updated 1210 GMT (2010 HKT)
As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
April 25, 2013 -- Updated 1656 GMT (0056 HKT)
Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
March 25, 2013 -- Updated 1355 GMT (2155 HKT)
The financial uncertainty in Cyprus is generating images of long lines at ATM machines and anti-European Union protests.
March 25, 2013 -- Updated 1815 GMT (0215 HKT)
Cyprus will "step up efforts in areas of fiscal consolidation." Where have we heard that before? Oh yes. Greece.
March 23, 2013 -- Updated 0139 GMT (0939 HKT)
The Cyprus debt crisis is being felt by the banks but also by the people who work at them. Nick Paton Walsh reports.
March 22, 2013 -- Updated 0010 GMT (0810 HKT)
CNN's Nick Paton Walsh reports on a Russian hotel maid caught up in Cyprus' financial crisis.
March 18, 2013 -- Updated 1608 GMT (0008 HKT)
Never underestimate the capacity of the Eurozone to shoot itself in both feet, says CNN's Richard Quest.
February 21, 2013 -- Updated 1603 GMT (0003 HKT)
Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.
ADVERTISEMENT