by: Harry Wilson
August 3, 2012
Banks face “wrenching times” after the spate of scandals that have hit lenders this year, according to Stephen Hester, chief executive of Royal Bank of Scotland.
Announcing a £1.5bn pre-tax loss for the first half of the year, Mr Hester said the “go-go year pre-crisis” had left the bailed-out bank and other major lenders with a host of problems they have still yet to deal with fully. “We turn over rocks and find new things we have to deal with,” said Mr Hester, as he pointed to the continuing costs of clearing up legacy problems and compensating customers for past scandals.
“We are in a chastening period for the banking industry,” he said. “The consequences of the sector’s past over-expansion are still being accounted for, probably with some way still to go.”
Mr Hester hit back at suggestions that RBS, which is 82pc owned by taxpayers after taking a £45.5bn state rescue package, should be fully nationalised.
“If there was a political decision to make loans to riskier borrowers … there are cheaper ways than buying back RBS,” he said.