Erikka Askeland: Maybe, despite its woes, it's time to stop poking sticks into RBS

IF STEPHEN Hester is annoyed he is good at keeping it to himself. But rest assured the chief executive of the Royal Bank of Scotland has got the most aggravating job in banking - especially since Eric Daniels, head of Lloyds Banking Group, announced he's heading off into the sunset.

Hester just can't win. Although everything is going according to plan at RBS, the City is still contemptuous of the ongoing efforts to turn the bank around. Yes, it is once again lossmaking, but then the shambles Hester found when he got there would require superhuman effort, a great deal of positive thinking and deep pools of patience from staff to fix - all the while facing brickbats from sneery analysts and grandstanding politicians. And if Hester told us what he really thought, he'd probably add media to make a trio of haters, but from that I will refrain from comment.

But of all the stuff in that 173 page third-quarter statement, the important part must be the bank's underlying performance.

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Of course, I consider it an important part of my job to interrogate company results to ensure that the real picture is clear. You may be shocked to hear that companies sometimes prefer to highlight weasel numbers like Ebitda or operating profit, and obscuring a bottom line which is simply either black or red deep within the figures.

The City reacted badly, with RBS coming near the top of the day's fallers on the FTSE100 with a 4.5 per cent drop in its share price to 45p. The sellers were disturbed by the step backward indicated in the bottom lines - a group loss of 1.1 billion, compared with 257 million of profit in the previous quarter.

But yet, let's not forget that sometimes there are reasons for the exceptionals and the weasels. The 825m insurance payment it made to the government (us!) for insuring any further weird losses is a good example. Only history will decide whether Hester's choice to buy expensive insurance through the asset protection scheme while his counterpart at Lloyds decided to go it alone was necessary. Right now, the jury is still out as to whether it will be needed.

Yet the reports provided by analysts was a mixed bag of encouragement and disparagement - albeit most slapped a "sell" on RBS stock, with the possible exception of Oriel Securities. But it's important to ask yourself, who are these guys aiming to advise? Long-suffering retail shareholders? Institutions? The fact is this bank is still 83 per cent owned by just one giant shareholder and it is still not paying dividends. Unless investors are keen on tracking a few pence movement here and there, there's not going to be much dramatic change until owners see the end of the taxpayer stake tunnel. And this is not likely to be until well after the coalition's banking commission reports back, which won't be until September, all things going well. Only then will the government have a clear view on the sale of some or all of its stake.

In the meantime, Hester's got a five-year plan and he's sticking to it. The even-mannered banker has rarely deviated from the set path, despite risk of personal and professional derailment - from the struggle to staunch the flow of key staff to the failure of his marriage.

Yet it would be nice to see from Hester, who tends to prefer taking a "grim reality" approach to his outlook, an idea of where the bank's growth may eventually come from. Currently its once-powerful global business and markets division is, understandably, not what it used to be but it could be better. The bank's top-down approach to restructuring too has hurt its wealth bank in Scotland at least.

But it is fighting a long fight. Also, the banks' lending to business was up by a third to 13.9bn on the same time last year, with 7.6bn of that going to small businesses. And this is even against a tide of falling loan applications - down 12 per cent.

Even small businesses, those fragile dependants on the cycle of lending, may see in this some reason to stop poking sharpened sticks into RBS's cage

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Half a million quid? Thanks, but I don't need it. Well, who would?

TOO bad for the gardening centres. Where else was Northern Rock chief Gary Hoffman going to spend that 500,000 gardening-leave pay-out before he took up his new job at NBNK Investments?

He's now waived the fee, if only for a peaceful life. Except it can sometimes be hard to feel too much compassion for anyone who feels rich and secure enough to say thanks but no thanks to half a million.

Perhaps we are seeing a trend, a new chic among the wealthy elite to refuse money. Instead of yachts, supercars and trophy wives, the new bragging rights are about how big was the bonus you waived.

Did he actually deserve the money? He has put a lot of work into turning around Northern Rock, splitting the good from the bad using the skills he gained from a career at Barclays. But in essence the job was one of a bureaucrat, working in a closed environment safe from the slings and arrows of the commercial markets.

Perhaps it would be better if more bankers took jobs such as these on secondment, working free for the government while being paid by banks. Then it would be up to the bank to decide how much the work was worth and the government could use what it would have paid in salary and bonuses towards the deficit.