LONDON (AP) — Royal Bank of Scotland PLC Chief Executive Stephen Hester said Tuesday that the bailed-out bank’s recovery is ahead of schedule as he defended its upcoming bonus packages against growing criticism.
Hester, who admitted that his own parents believe he is overpaid, said the bank, majority owned by the government after an infusion of state aid, was two-thirds of the way through cutting the size of its balance sheet and had already halved the size of its troubled investment bank.
“We are well ahead of where I thought we would be,” Hester told lawmakers while giving evidence to a cross-party committee. “We did not slip on as many banana skins as I thought we might.”
“That gives me encouragement to believe we can hit all the ambitious targets we put out for the recovery of RBS,” he added.
Hester was reporting to the Treasury Committee alongside the chief executives of Northern Rock, the mortgage lender that was the subject of Britain’s first bank run in a century, and Lloyds Banking Group PLC, which is also part-owned by taxpayers after a government bailout.
The three were appearing amid growing speculation that bankers’ bonuses, blamed by many for fueling the global credit crisis by focusing on short-term gains rather than long-term sustainability, will not be curtailed.
Wall Street is expected to hand out multibillion dollar bonus pots in an earnings season that begins with JP Morgan Chase on Friday and there are fears that British banks will come under pressure to follow suit.
Hester declined to give specific answers to questions from lawmakers on the planned level of bonuses at RBS, which he expects to be determined in late February, but said he was “not going to pay a penny more than we need to” in order to keep good staff.