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June 13th, 2013 
Peter Nolan
SHARES in Britain’s state-rescued Royal Bank of Scotland have slumped, one day after chief executive Stephen Hester quit, and as the company axes another 2000 jobs at its investment banking division.
RBS shares dived by as much as 8.2 per cent in early trade on Thursday, as investors fretted over news of Hester’s departure.
However, the stock clawed back some ground to finish at 315 pence, down 3.3 per cent on London’s benchmark FTSE 100 index, which ended 0.08 per cent higher.
In a shock announcement, Hester said late on Wednesday he would step down later this year to allow someone else to help RBS return to the private sector.
And in a fresh twist on Thursday, the Edinburgh-based bank will axe up to 2000 posts or about 20 per cent of its markets division by the end of 2014, according to a person familiar with the matter.
The latest round of job cuts adds to the almost 40,000 jobs that RBS has axed in a drastic restructuring over the past five years.
The lender also announced it would take steps to reduce the balance sheet of the markets division to under STG80 billion ($A133.21 billion) by the end of 2014, in line with previous guidance.
As part of a new strategy, RBS will exit all structured retail investor products and equity derivatives.
RBS was ravaged by its badly-timed consortium takeover of Dutch bank ABN Amro at the top of the market in 2007, just before the financial crisis struck, and was kept afloat with STG45.5 billion of British taxpayer cash.
Hester said on Wednesday the task of putting RBS on an even footing while meeting the demands of the government – which still owns 81 per cent of the bank – had been at times bruising.
In a memo to the group’s 100,000 employees on Thursday, Hester stressed how dire the situation was at the height of the 2008 global financial crisis when he was appointed.
“RBS lost sight of why it was founded, and it nearly died as a result. We’ve got back to a place where we can once again focus on the customer above all else,” he told staff.
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