So Stephen Hester is to leave RBS, and, it seems, not entirely of his own volition. This matters to those not normally bothered about the world of business, because RBS is owned by We The People following the financial crisis in 2008, when it became clear that the bank had made some seriously bad decisions and that, left to its own devices, would have gone bust.
Who is behind the removal of the CEO who has steered RBS from nearly going down the pan to its present position of relative stability? All enquiries point to the Rt Hon Gideon George Oliver Osborne, heir to the seventeenth Baronet, following a period when Hester – a real businessman – had not seen eye to eye with Osborne, whose real business experience extends mainly to being an NHS data entry clerk.
And Osborne’s intervention has had two less than desirable consequences for us hard pressed (and, no doubt, hard working) taxpayers: first, he has allowed the news to get out that a sale of RBS back into private sector ownership has not only been decided upon, but also has been scheduled to start at the end of next year, and probably be completed by the next General Election.
With more and more voicing concern that there may be another market downturn in the offing – share prices, particularly in the Far East, have been showing signs of nerviness of late – Osborne is giving a very significant hostage to fortune by letting that news leak. The potential for political opponents to target him in the run up to the election, especially if he remains Chancellor, is immense.
So what of the second consequence of Osborne’s actions? Well, last Monday the market capitalisation of RBS was £32.02 billion. The following day it had fallen back to £31.26 billion (maybe someone already knew what was coming) and, following the confirmation of Hester’s departure, it fell further to £30.07 billion, which means almost two billion wiped off an already low market value.
And this is as a result of the actions of someone who has constantly bad-mouthed his predecessors, especially Pa Broon, over their fitness for office, and who is going, unless Young Dave is persuaded otherwise, to be put in charge of flogging off RBS in time to get the Tories some dosh, and some favourable publicity, before they have to go to the country, hoping to be voted back in.
Perhaps this is why there has been some particularly lame spin, exemplified by a laugh-out-loud example from CCHQ Press Office where they are reduced to citing the Express, which in turn based its “story” on figures the Tories had claimed was the result of “new research”. The Tories are vulnerable on this as never before, and no amount of spinning will improve their position.
They would be better advised concentrating on getting our money back.