RBS boss retires early

Tuesday 3rd February 2009

The chairman of Royal Bank of Scotland (RBS) is to step down today.

Sir Tom McKillop was due to retire in April – but he has moved aside to allow his replacement Sir Philip Hampton full rein as he attempts to reorganise the business.

The taxpayer currently owns 70 per cent of RBS – and the lender is set to announce a loss of £28 billion, largely linked to the group's takeover of ABN Amro in 2007.

Sir Tom had faced criticism for not holding RBS's expansion under Sir Fred Goodwin in check – which eventually led the bank unable to cope in the credit crisis and turn to government help.

Sir Tom said: "While my retirement was originally planned for April 2009, I believe it is appropriate to bring this forward so that Sir Philip can complete the restructuring of the board and work with the board and executive teams on the strategy going forward.

"I wish Sir Philip and the board every success in this difficult financial and economic environment as they strive to restore the bank's prosperity."

Sir Philip said: "Tom McKillop has chaired RBS through unprecedented turbulence in financial markets with great dedication and integrity and the board wishes him well.

"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."

Although the government is set to own 70 per cent of the business, the Treasury is keen not to take open direct control of the bank.

Last month Alistair Darling said: "We are making clear is that the government would not be involved in the day to day operations of banks.

"Shareholdings are managed through a company – UK Financial Investments – and they deal with that because the day to day decisions have to be taken."

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