Philip Hampton: ‘It’s a very different bank from the one I walked into three years ago’

A YEAR ago, there were forceful calls for the FSA to publish a report into the failure of RBS.

The argument was that if we did not understand the mistakes that led to RBS’s near collapse, there was nothing to stop them from being repeated in the future.

But there is another reason why today’s report from the FSA matters. The bank’s shareholders, employees and the public were angry at the failure of RBS three years ago. If no action could be taken by the FSA to punish those who led the bank to a £45bn bailout, the public were going to have to see a full and formal reckoning of how that could be the case. They would want a full account from the FSA on went wrong and what should have been done to stop it.

The FSA’s view as set out today will be just that – a view. But it will be an important contribution to the steps needed to restore public trust in RBS, the banking sector and our regulators.

When [chief executive] Stephen Hester and I took over the leadership of RBS three years ago, we reviewed much of the same ground. The task was to stabilise the bank and put it back on a sustainable footing. We had to understand what had gone wrong and which staff had to be held accountable for their part in the bank’s failure.

The change programme at RBS has been huge. We have aggressively reduced the bank’s exposures, substantially reducing a balance sheet that was once the world’s biggest. We have fundamentally changed the way we pay our staff. Bonuses are not only smaller, but linked to the long-term strategy of the bank, as they always should have been in the past. Importantly, we are undertaking a huge transformation of the way we support our customers. Through our industry-leading customer charter and reforms right across our businesses, we are seeking constant enhancements to the service we provide the people who rely on us. We are working to become Britain’s most helpful bank, and we will become vastly more open and transparent as we progress.

The result of all of this is an RBS which is greatly changed from the bank I walked into three years ago or the one that is described in today’s report. Our leadership is new, with all senior executives who were responsible for the bank’s crisis no longer in the company. We are safer and stronger, with capital and liquidity levels among the strongest in Europe.

We want to show that the painful lessons of this crisis can be applied to the creation of an organisation that sets a new standard for corporate performance and behaviour.

We know we have a long road ahead. But it’s my hope that the new leadership of RBS and our hard-working staff will be able to firmly shift our focus to the future of this company.