Those expecting RBS boss Stephen Hester to crash and burn on the R4 Today programme this morning will have been disappointed. He was clearly a little nervous, which is hardly surprising given the events of the last few weeks. But whilst he is not a natural interviewee, he acquitted himself well.
Jim Naughtie had a go at asking why a £1.2m salary was not enough and why he needed to be considered at all for a bonus. Hester dodged the question and focused instead on pay in general – rather deftly, but politely, bringing up Naughtie’s salary and contrasting it with that of a nurse. From there Naughtie moved on to other topics..
Hester had two major points to make. He wanted to remind listeners what the RBS disaster was really all about. By the the time the crash came, RBS had liabilities exceeding £2trillion, a sum bigger than the entire UK economy. Hester said that in shrinking the RBS balance sheet he was in the process of defusing the biggest balance-sheet time-bomb in history. A good line, and true.
And then he slipped in a rather important statement. As Robert Peston noted afterwards, Hester said the £45bn that Brown and Darling put into the bank by buying 60%, then 80+% of the company was “gone”. In essence the cost of dismantling Goodwin’s empire and cleaning up RBS has already cost an incredible £38bn – that’s on top of the money the government put in when it bought the bank in October 2008.
I remember in late 2008 being told by languid Treasury types and various fellow-hacks that when it was all over we would probaly turn a profit once RBS was sold back into the private sector. Not really turning out that way, is it?
