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Departing RBS chief saved the bank. Who will save it now?

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Hail the conquering hero? Royal Bank of Scotland shareholders have a lot to thank Stephen Hester for, despite the outcry every time he thought about taking a bonus. True, the share price has fallen by a third during his tenure. But he has taken the bloated, bailed-out mess he inherited from Fred Goodwin in 2008 and turned it into something the government, which owns 82 per cent, can consider privatising. The bank made a £24-billion ($38.3-billion) net loss in the year he started. This year a £2-billion profit is expected.

The challenge ahead is, arguably, just as daunting. The new chief has to convince investors to buy £30-billion of shares. Selling equity on that scale requires an investment proposition that will go beyond "RBS will be less of a basket case in the future than it was a few years ago." Mr. Hester's pitch to investors has, understandably, been just that. Results presentations stress where the bank is now against its "worst point" on metrics such as wholesale funding and tier one capital.

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His successor will have to think creatively. RBS has to convince new investors it can generate decent shareholder returns even if the U.K. economy remains stagnant. That will not be easy when politicians complain of a lack of competition in retail banking and are desperate for more entrants to win market share from the likes of RBS. The challenge is even greater in the investment bank. It has absorbed a big chunk of the cuts as Mr. Hester has shrunk RBS's balance sheet. But what is it for now, and can it compete against the big boys?

These are all questions that Mr. Hester, a (crocodile?) tear in his eye as he departs, can leave to someone else. For him, perhaps, a role with a higher salary and a lower profile. For his successor, a daunting sales job. For those who own the shares, more uncertainty. But they should be used to that.

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