ITN's Deputy Political Editor Chris Ship explains why Stephen Hester's time ran out at RBS.
The man in charge of steering RBS back into private hands - retrieving £45bn of taxpayers cash in the process - is to leave the bank.
RBS chief executive Stephen Hester has announced he is to leave the taxpayer owned bank. But was he forced out or did he jump.
The Royal Bank of Scotland is reportedly poised to name insider Ross McEwan as chief executive Stephen Hester's successor.
The banking giant was in late-stage talks with the Bank of England's Prudential Regulation Authority over his the appointment, the Financial Times (£) reported.
McEwan, who currently heads RBS's retail banking arm, could be announced as the bank reveals its half-year results today.
Commenting on Stephen Hester's departure from RBS last month, the Business Secretary Vince Cable appeared to criticise the taxpayer-owned bank for not doing enough to lend to small and medium firms (SMEs):
He performed a necessary role at a difficult time...RBS needs more of a focus on SME (small and medium enterprise) lending, supporting the economy.
The Prime Minister told Bloomberg:
As for when we get it back into the private sector, I just have two very simple concerns: one is we must make sure this bank contributes to the recovery of the UK economy; secondly, people put their money in - I want them to get their money out.
As we work with this bank as it's nursed back to even further health, the public want to know 'Am I going to get my money back?'
I think they are more interested in getting their money back than the time. Let's get it right.
He also paid tribute to the bank's outgoing chief executive Stephen Hester:
He's done an enormous amount to shrink the balance sheet and to get the bank into a more healthy position, to get it out of crisis and into recovery.
Shares in RBS ended the day having recovered a little bit, but still down four percent.
The City hates any interference in its affairs by the government.
Labour overpaid by £12 billion when bailing out the Royal Bank of Scotland with taxpayers' cash, the Conservatives have claimed.
Treasury Minister Sajid Javid said research on the then-Labour government's £45 billion bailout in 2008 had indicated the over-payment on the bank's share price.
Mr Javid hit back at suggestions from the Opposition that the Government's confused handling of RBS chief executive Stephen Hester's impending departure had contributed to share prices in the bank dropping this morning.
Labour's shadow treasury minister Chris Leslie had told the Commons this had wiped an estimated £2 billion off the value of the taxpayers' stake in RBS.
Chancellor George Osborne sacked RBS chief executive Stephen Hester, Labour MPs have claimed.
Dave Watts, who represents St Helens North, said it was clear from Treasury Minister Sajid Javid's statement that Mr Hester had been sacked by the Chancellor and asked if a gagging clause is in place.
Barry Sheerman, MP for Huddersfield, urged Mr Javid to be "honest that you've just sacked this banker for your own purposes".
Shadow Treasury minister Chris Leslie also sought clarity from the Government as to whether Mr Hester left voluntarily or was "pushed".
Conservative Mr Javid said the Chancellor had not been directly involved in meeting with Mr Hester prior to yesterday's announcement. He said the decision on Mr Hester's future was taken by the RBS board and its chairman.
RBS chief executive Stephen Hester made an important contribution to Britain's recovery from the financial crisis, Treasury Minister Sajid Javid said today.
Mr Javid told the House of Commons that RBS could now be prepared for a return to the private sector, adding it would have a far greater focus on it retail operation within the UK.
He said Mr Hester, who yesterday announced that he was stepping down as chief executive, would receive a final package of only one third of what he could have received under the contract drawn up by the last government.
Mr Javid said that when Stephen Hester took over the bank was on the edge of collapse and posed a huge risk to financial stability.
"It had been bailed out by the British taxpayer at a cost of over #45 billion. Stephen Hester brought it back from the brink and since then he has worked hard to make RBS a safer and a stronger bank, better able to support its customers."
"Stephen Hester has made an important contribution to Britain's recovery from the financial crisis."
Economic Secretary to the Treasury Sajid Javid has told MPs it's reassuring that RBS boss Stephen Hester is staying on until a successor is found - the markets seem to think it would have been more reassuring if he was not leaving!
Nick Clegg has defended job losses at RBS. The Deputy Prime Minister said the bank needed to shrink to a "sustainable" size.
On his LBC 97.3 phone-in show, he said: "RBS is going through a massive, massive change in which Stephen Hester has obviously played a significant part in this first episode.
"It wouldn't be in existence if it wasn't for the generosity of taxpayers ... but it needs to downsize, it can't carry on being this huge, big, hulking, what they call universal, bank.
"It's got to shrink down to a size where it has got a sustainable, stand-alone future. That's what all of these painful reforms are all about.
"Unfortunately it does mean that people who, for instance, have been working in the investment arm of NatWest, which I would argue is not the absolute central purpose of a taxpayer-funded bank, that's being shrunk down to size."