The chief executive officer of Royal Bank of Scotland Group PLC (NYSE:RBS), Stephen Hester, has been asked to step down by the bank's board directors. The move comes as RBS, which has been government-owned since 2008, prepares to return to private sector status.
"While leading that process would be the end of an incredible chapter for me, ideally for the company it should be led by someone at the beginning of their journey," Hester said in a statement. "I will therefore step down at the end of this year."
The U.K. government is preparing to start selling its 81 percent stake in RBS as well as its 39 percent holding in Lloyds Banking Group PLC (LON:LLOY), and is expected to do so well ahead of the country's next national election in 2015.
"This is a board decision - it's not mine," said Hester. "But I understand the rationale."
Hester became RBS' CEO in 2008 at the height of the financial crisis and immediately following the departure of Fred Goodwin, who left the company as it required a $71.4 billion taxpayer bailout.
"Having brought RBS back from the brink," said Chancellor George Osborne in a statement, "now is the time to move on from the rescue phase to focus on RBS being a UK bank that provides greater support to the British economy."
The move comes after a number of weeks in which Hester stepped up his efforts to complete the job. But RBS Chairman Sir Philip Hampton said the board had been thinking about succession for a while and also admitted that the decision to ask Hester to step down by the end of 2013 followed discussions with the Treasury Department earlier the same day.
"Of course I'd like to have stayed as I feel I've been in the trenches with all of my people helping RBS to recover, and privatization would have been a fitting end to those endeavors," said Hester, "but it has been a very bruising and difficult job so I certainly don't have to be prized away reluctantly."