Page last updated at 22:14 GMT, Tuesday, 25 August 2009 23:14 UK

RBS 'not a toxic brand' says boss

By Douglas Fraser
Business and Economy Editor, BBC Scotland

RBS chief executive
RBS chief executive Stephen Hester says it has been "business as usual"

Staff at the Royal Bank of Scotland have opened up about how the culture at the bank has changed after a year of record losses and damaging headlines.

During the bank's crisis weekend last October, RBS chief executive Stephen Hester was given only six hours to decide if he wanted to take on the ultimate corporate challenge - clearing up the colossal damage to a £2.2tn balance sheet left by his predecessor Sir Fred Goodwin.

But he claims that it has been business as usual for many of the bank's customers while he has been steering it through some extraordinary challenges.

Mr Hester said: "One of the huge, huge, huge things that I can say positively about RBS, and which makes me very optimistic for our future is, despite the kicking we've received in the worst possible way over the last year, not a single one of our businesses anywhere around the world of any kind has lost customers in a material way.

I think people in RBS are deeply conscious of being associated with an institution that spectacularly failed
Stephen Hester, chief executive

"That tells you we do something very important for our customers that they value."

And he has a clear vision that he says has already been adopted by the bank.

"I have set out to drive very clearly a spirit of openness, transparency, disclosure, of blunt-speaking, thoughtfulness, and empowerment... and of course changing cultures takes years not months."

The RBS boss was speaking in a rare, in-depth interview for a BBC Radio 4 documentary, Rebooting RBS.

Grand headquarters

The BBC had rare access to the bank's grand global Gogarburn headquarters, on the outskirts of Edinburgh, built on 110 acres as a fitting place for its ambitions as one of the world's five biggest banks.

The move from its former elegant, traditional, low-key headquarters in Edinburgh's city centre to the new landscaped campus was driven by Sir Fred.

It has come to be seen as symbolic of its shift from canny money management into a more rootless and ambitious recklessness.

The high-spec new office for more than 3,000 staff features a shopping centre through its main "street".

But parts of the complex previously designated as no-go areas for anyone lower than top executives, have now been opened up for other staff to hold meetings and enjoy.

'Survival exercise'

Changes at the bank have had a flow-on effect to the "high street" - opening times for its hairdresser, bookstore and coffee shops have been cut back as staff budgets have tightened.

One former employee said Sir Fred had paid great attention to detail in creating the new headquarters, but he also created a culture of fear.

Sir Fred Goodwin
Hester took over from tabloid hate-figure Sir Fred Goodwin

For many, the shock that gripped the organisation from its bail-out in October, lasted until at least the start of this year.

Matthew Kirkby, a senior figure in its investment banking division, said: "At times, this was not far off a wartime-type survival exercise.

"You really were facing situations where there was quite a lot of misinformation in the market about RBS."

"What Stephen has done very well, is that he has been open... Stephen is making it very clear that he wants people to be accountable and to raise issues."

Riding high

Peter Ibbetson, chairman of small and medium-sized business lending, who rejoined the company to help the recovery, recalled finding one colleague staring bleakly into a screen, wondering whether he should buy five shares or a Twix bar.

But he said public anger has now abated.

"There here was a period where if you were in a pub and somebody said, 'who do you work for and what do you do?' you might um and ah for a minute.

"That changed several weeks ago when I had lunch with an MP, and the MP was asked what he did in life and he said, 'I'm a banker', rather than saying he was an MP."

Robert Peston

When it was riding high, the RBS share price was above £7, and many staff invested in shares as part of their financial planning.

It sponsored leading sports stars including tennis star Andy Murray and his brother Jamie.

Their mother Judy said sticking with RBS was payback for it sticking with her sons when they were young and struggling in their careers.

One staff member accused the media of treating RBS unfairly over Sir Fred's highly controversial pension arrangements and has mixed feelings about BBC Business Editor Robert Peston.

Anna Hart, of group human resources, said: "It was like a vendetta against RBS, because we weren't the only organisation in that situation."

But Mr Hester said he did not believe staff were in denial about the public anger towards RBS management.

He said: "I think people in RBS are deeply conscious of being associated with an institution that spectacularly failed.

"Quite rightly, they don't necessarily blame themselves, because the vast majority of our people were doing their jobs properly and well."

'Low marks'

Rita Clifton, British chairwoman of the consultancy Interbrand, said the bank needed to acknowledge its mistakes, over-compensate for them, and "communicate, communicate, communicate".

But against those measures, she gave RBS low marks - particularly on communication.

Mr Hester said his recent focus has not been on managing the RBS brands, and those it controls, from NatWest to Citizens Bank in the US, and the insurer Churchill.

Queen at RBS in 2005
The Queen opened the RBS Edinburgh headquarters in 2005

Instead, he stressed that the brand would be defined by how it treats its customers from here on in.

He said: "To make that positive, to make the institution strong, to serve our customers well, to provide returns for our shareholders and all the pensioners dependent on that - that is much more important than forever hand-wringing about the past.

"That is not in any way to say we shouldn't be apologetic about the past, but the best way to apologise for the past is to make the future better."

He added: "The RBS brand is not toxic.

"Our customers, those dealing with the RBS brand and those dealing with our other brands, are with us and they are doing business with us in roughly the same amounts they were before."

So enough of the humility?

Mr Hester said: "It's much harder to say 'Here's a humble overdraft, or a humble loan or here's a humble foreign exchange transaction'.

"People don't want a humble foreign exchange transaction. They want one that works."

Rebooting RBS will be broadcast on BBC Radio 4 on Wednesday 26 August from 1100 BST, and then available on BBC iPlayer for seven days.



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SEE ALSO
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