RBS shares drop following CEO departure

RBS shares close 3.3 percent lower following announcement that CEO Stephen Hester to depart

Associated Press
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A RBS, Royal Bank of Scotland, illuminated sign and logo are seen through revolving doors inside an entrance of their offices in London, Thursday, June 13, 2013. Bailed-out U.K. lender Royal Bank of Scotland said Wednesday that Stephen Hester will step down as chief executive later this year — a move that creates some uncertainty as the bank prepares to return to the private sector. The board of the bank, which is 81 percent owned by the taxpayer after it was rescued by the U.K. government in 2008, said Hester was unable to make an open-ended commitment to lead the bank back into the private sector after having already served five years. The search for a successor will begin immediately. (AP Photo/Matt Dunham)

LONDON (AP) -- Royal Bank of Scotland's share price fell amid uncertainty about the future following the announcement that chief executive Stephen Hester was leaving by year's end.

Shares in the bank bailed out by the British taxpayer dropped 3.3 percent Thursday to close at 315 pence. At one point, the stock was as low as 299 pence.

The volatile day came as the bank said it would trim 2,000 jobs through 2014 as part of changes in its markets business.

Nic Clarke, a banking analyst at Charles Stanley, says Hester's departure was a "damaging development."

It comes amid speculation that the government wanted a new leader to usher in the bank's return to the private sector. Clark says Hester's departure smashes any lingering pretense that RBS is being run at "arm's length."

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