Royal Bank of Scotland has confirmed it is to cut a further 2,000 jobs in its investment banking division.
But the job that the financial markets are focused on is that of chief executive Stephen Hester.
The bank’s shares tumbled following the surprise announcement he is to step down later this year.
RBS’s board apparently wants new leadership to oversee the sale of the Britain government’s majority stake in the bank, which had to be rescued with over 50 billion euros of taxpayers’ money during the 2008 financial crisis.
The investment banking jobs will be cut over the next two years as part of moves to reduce costs.
Under pressure from the government, RBS has massively shrunk its investment bank and focused on lending to British households and businesses.
Royal Bank of Scotland faces an difficult task in finding a new chief executive from a tiny pool of candidates to steer it through privatisation.
The bank needs an experienced banker untainted by the industry’s scandals who is also used to dealing with its biggest shareholder, the government, as well as lawmakers and regulators.
During his five years at the helm, Hester oversaw a massive shrinking of the RBS balance sheet, all the while parrying criticism from politicians about the strategy and the size of his bonus.
Only a small number of people would meet the criteria for a new chief executive and chairman Philip Hampton, who will lead the search, admitted there would not be a large number of candidates.
“There is a relatively limited pool of people. You also have the problem that it is a little bit of a poisoned chalice because of the interference of the politicians,” said Heinz Geyer, Managing Director, Temple Associates, a consulting and recruitment firm for the financial services industry.