Page last updated at 11:46 GMT, Tuesday, 3 February 2009

Royal bank chair steps down early

RBS branch
The government holds a 70% stake in Royal Bank of Scotland

The chairman of part-nationalised Royal Bank of Scotland has stepped down two months earlier than planned.

Sir Tom McKillop - due to retire in April - brought forward his departure to allow successor Sir Philip Hampton to overhaul the troubled bank's board.

RBS is set to be 70% owned by taxpayers after a year of turmoil which could leave it as much as 28bn in the red.

Sir Tom said he wished Sir Philip and the board every success in the difficult "financial environment".

The bank executive - who was paid 750,000 as chairman of RBS in 2007 - is likely to face probing questions from MPs on the Treasury Select Committee next week over the board's supervision of the business.

It is now my privilege to chair a group with very significant challenges but with fundamental strengths in its people and businesses
Sir Philip Hampton
New RBS chairman
RBS led a consortium which bought Dutch bank ABN Amro in 2007 at the very peak of the market, while its investment banking business was heavily exposed to the complex financial instruments hit by the credit crunch.

Sir Fred Goodwin - who led RBS on its acquisition spree before resigning in the wake of the first bank bail-out last October - will also answer to MPs next week. He has been replaced by former British Land chief Stephen Hester.

Sir Philip said his predecessor had seen RBS through "unprecedented turbulence in financial markets with great dedication and integrity".

He added: "It is now my privilege to chair a group with very significant challenges but with fundamental strengths in its people and businesses.

"We are extremely fortunate to have the support of the UK Government and taxpayer as we restructure the group and we mean to repay that support as soon as is practicable."

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