LONDON: Shares in Royal Bank of Scotland slumped on Thursday, a day after the state-rescued lender said that chief executive Stephen Hester was stepping down to allow someone else to help it return to the private sector.
RBS plunged 6.20 percent to 305.4 pence in early trading on London's benchmark FTSE 100 index, which was down 1.15 percent overall at 6,226.77 points.
"The market can only hope that a replacement has already been identified in order to minimise the uncertainty which has now been added to the company's turnaround plans," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
"Speculation regarding further cuts to its markets operations are adding further fuel to the uncertainty," he added.
Reports said RBS was planning to announce on Thursday plans for a further 2,000 job cuts, adding to the almost 40,000 jobs it has axed over the past five years.
The Edinburgh-based lender 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 £45.5 billion ($71.3 billion, 53.5 billion euros) of British taxpayer cash.
Hester, who will leave his role later this year, said on Wednesday that the task of putting RBS on an even footing while meeting the demands of the government, which still owns 81 percent of the bank had been at times "bruising".
The bank explained that the decision for Hester to leave after five years as chief executive had been taken to give his replacement time to prepare the privatisation process.
"Stephen was unable to make that open-ended commitment following five years in the job already," RBS said in a statement.
But Hester later expressed "some human regrets" that he would not get the chance to oversee the transition himself.
He is meanwhile set to receive 12 months' pay and benefits worth £1.6 million and a potential £4-million shares windfall from a long-term incentive scheme. However, he will not receive a bonus for 2013. (AFP)
