Royal Bank of Scotland plans return for UK taxpayer investment

Stephen Hester, the chief executive of the Royal Bank of Scotland, has promised UK taxpayers a return on their investment in the medium term. This comes despite the fact that bad debts have ballooned at the majority state-owned banking group and the company has again been forced to take further finance from the UK government. So what next for the Royal Bank of Scotland?

Despite being arguably the largest bank in the world only two years ago, the Royal Bank of Scotland will be a very different animal after the recession is over and the company has been forced to sell off significant assets and a large chunk of its bank branch network. However, Stephen Hester believes that the bank will be able to deliver a return on UK taxpayer investment although at this moment in time the jury is very much out.

This is a bank which with hindsight had invested recklessly in the past, taking on companies which were potentially overvalued and chasing the next expansion plan and the next pound of profit. While much of this was due to pressure from institutional shareholders to expand the operation globally, there is no doubt that under Sir Fred Goodwin there was a very different mentality about expansion and investment.


UKCIG Investment news, November 2009