RBS chief Stephen Hester not taking £2.4m bonus after computer meltdown that hit millions

By TOM PETERKIN
Published on 30/06/2012 00:00

ROYAL Bank of Scotland chief executive Stephen Hester is to waive his bonus this year, after the computer systems failure that caused disruption to millions of customers.

He announced he would not take his bonus, estimated at £2.4 million, which comes on top of his £1.2m salary. “I think it’s inappropriate for me to have a bonus this year,” Mr Hester said. “We have let our customers down. That may have arisen from old systems and things that were before my time, but I think we could reasonably be expected to have improved things since then and, clearly, we didn’t improve them enough, so it wouldn’t cross my mind to have a bonus this year.”

In a letter to the Commons’ Treasury select committee, he said he was determined to “personally lead the process” of regaining the trust of customers hit by this week’s computer meltdown, which also hit Ulster Bank and NatWest.

He gave further details of how the incident happened and promised a “full and detailed investigation”.

Mr Hester said the group’s initial findings suggested problems were created when maintenance on its systems, managed and operated by its team in Edinburgh, created an error on Tuesday of last week that stopped people’s accounts updating properly.

He said the knock-on effects had been “substantial” and the problem was made worse because the team could not access a record of the transactions that had been processed up to the point of failure.

A “substantial backlog” was created because the group, which processes 20 million transactions a day, had to try to pinpoint the moment at which processing had stopped, which created more delays.

Mr Hester admitted it was unclear why the transaction record was not available.

He said in the letter: “There is much to do on many fronts and we clearly have yet to achieve a satisfactory level of systems resilience as part of that, albeit this was a unique incident.

“I therefore view this incident with the utmost seriousness, hitting customers as it did.”