Stephen Hester

Stephen Hester
Born	1960-12-14December 14, 1960 (age 65) Ithaca, New York, United States
Nationality	British
Education	Easingwold Comprehensive School; Lady Margaret Hall, Oxford (BA, Politics, Philosophy and Economics)
Occupation	Banking and insurance executive
Company	easyJet; Nordea Bank Abp
Title	Chairman of easyJet plc; Chairman of Nordea Bank Abp
Spouse	Barbara Abt (m. 1991)
Children	Two

Sir Stephen Hester (born 14 December 1960) is a British banking and insurance executive. He was group chief executive of the Royal Bank of Scotland Group from 2008 to 2013, during which the bank was a government-controlled listed company following its 2008 state rescue, and group chief executive of the insurer RSA Insurance Group from 2014 to 2021. As of September 2026 he serves as non-executive chairman of the airline easyJet plc, a position he has held since December 2021, and as chairman of the Finnish banking group Nordea Bank Abp, a position he has held since October 2022.

Hester spent the first part of his career at the investment bank Credit Suisse First Boston before moving into UK financial services and property, holding chief executive roles at three London Stock Exchange listed companies over roughly 17 years: British Land, Royal Bank of Scotland and RSA Insurance Group. At RBS he led the restructuring that followed the bank's 2008 bailout by British taxpayers, and at RSA he led a turnaround that culminated in the company's sale to a consortium of the Canadian insurer Intact Financial Corporation and the Danish insurer Tryg A/S, agreed in 2020 and completed in 2021.

Since leaving RSA, Hester has combined his chairmanships of easyJet and Nordea with a non-executive directorship of the technology services company Kyndryl and, previously, the senior independent directorship of the energy supplier Centrica. He was appointed Knight Bachelor in the 2024 New Year Honours for services to business and the economy.

Early life and education

Hester was born in Ithaca, New York, in 1960. He grew up in North Yorkshire, where his father was a semi-retired chemistry professor at the University of York and his mother was a psychotherapist. He was educated at Easingwold Comprehensive School in North Yorkshire before going up to Lady Margaret Hall, Oxford, where he read Politics, Philosophy and Economics and graduated with first class honours. At Oxford he was president of the Tory Reform Group, and he has subsequently made donations to the Conservative Party.

Career

Credit Suisse First Boston

Hester joined the investment bank Credit Suisse First Boston at the start of the 1980s, immediately after graduating from Oxford. He was involved in the launch of the world's first Eurosterling bond, issued on behalf of British Gas, and became the bank's youngest-ever managing director at the age of 35. RBS's own regulatory filings, prepared while he was the bank's chief executive, describe him as having gone on to hold the positions of chief financial officer, head of fixed income and co-head of European investment banking at the bank. UK corporate records show Hester as a director of Credit Suisse Securities (Europe) Limited from before September 1992 until 27 September 2001. He left the bank in 2001 after a change of leadership: incoming chief executive John Mack, according to a later account by The Scotsman, considered Hester not a team player, while Hester considered himself to have been seen as a threat by Mack.

Abbey National

Hester left investment banking for UK retail and wholesale banking, joining the building society turned bank Abbey National plc as finance director to its newly appointed chief executive, Luqman Arnold, and later took on the additional role of chief operating officer. Abbey National's share price had fallen after its demutualisation, and the company had rejected earlier takeover approaches from the Bank of Ireland and National Australia Bank before Arnold and Hester's restructuring of the business helped attract a takeover bid from the Spanish banking group Banco Santander in 2004, reported at the time at values ranging from £8 billion to £9.5 billion.

British Land

Hester succeeded the company's long-serving founder, Sir John Ritblat, as group chief executive of British Land, the FTSE 100 property investment and development company, guiding Ritblat into the roles of non-executive chairman and then life president. He was credited with introducing greater transparency to the company's dealings and cutting costs during a four-year tenure. UK corporate records show him as a director of The British Land Company Public Limited Company from 12 November 2004 to 15 November 2008.

Royal Bank of Scotland (2008 to 2013)

In February 2008, Chancellor of the Exchequer Alistair Darling appointed Hester as non-executive deputy chairman of Northern Rock, days after the bank was nationalised.

In October 2008, at the height of the global financial crisis, the Royal Bank of Scotland Group was rescued by the United Kingdom government, which took a majority shareholding in the bank. Hester was appointed to the RBS board on 1 October 2008 and to the position of group chief executive on 21 November 2008, succeeding Fred Goodwin. Gordon Brown, then prime minister, and Darling asked Hester to take the role; friends were reported at the time as saying he felt a sense of public duty in accepting it. At RBS he led what the bank's own chairman later described as a restructuring designed "to correct the aspects of its business that made it particularly vulnerable to the financial crisis of 2008," work Hester himself referred to as "the heavy lifting." One of his early acts as chief executive was to ground the £17 million private jet used by his predecessor for global travel. RBS sold off billions of pounds of non-core assets, closed branches and cut more than 11,000 staff as it shrank to a more sustainable size during his tenure.

Over Hester's five years in charge, RBS reduced its funded balance sheet by more than £487 billion and its total assets by more than £1,191 billion compared with the position at the end of 2008, while repaying hundreds of billions of pounds of government and central bank funding support. The bank's chairman, Philip Hampton, wrote in the company's 2013 strategic report that this work had "transformed the financial position of the bank" and had "removed the imminent threat that our size, risk and complexity posed to the UK economy."

In June 2013, RBS announced that Hester would step down as chief executive. A 2015 profile reported that Hester's relationship with Chancellor of the Exchequer George Osborne, who through the government's majority stake effectively controlled senior appointments at the bank, had become strained over the pace of returning RBS to private ownership and the future size of its investment bank, and that Hester had told colleagues he had not spoken to Osborne for two or three months before his departure was announced. He left the RBS board on 30 September 2013, a date confirmed by UK corporate records, and was succeeded by Ross McEwan. Hampton thanked Hester "for his dedication to RBS" and congratulated him "on his success in putting the bank on to a sound footing." RBS's own remuneration disclosures record that Hester received no annual bonus for either 2012 or 2013.

RSA Insurance Group (2014 to 2021)

Hester became group chief executive of RSA Insurance Group, the FTSE 100 general insurer, in February 2014. Describing his brief on arrival, he said: "I joined RSA in February 2014 with a mandate to lead the Company in three urgent tasks. These were: to thoroughly identify the sources of RSA's performance weaknesses; to devise plans to fix these and address internal and external challenges to realising RSA's potential; and then to implement those plans."

RSA had reported a pre-tax loss of £244 million in 2013, the year before Hester arrived. Under his leadership the company sold a series of non-core international businesses, including operations in the Baltic states, Poland and Thailand, raising more than £800 million in announced disposal proceeds by early 2015, and completed a £773 million rights issue in May 2014 alongside a £400 million bond refinancing. By the time RSA reported its 2014 results, the company had returned to profit, with a pre-tax profit of £275 million, and had resumed paying a dividend after suspending it during the crisis. Core business operating profit for 2014 was £367 million, up 17% on 2013, made up of £251 million from Scandinavia, £107 million from Canada and £147 million from the UK.

Under Hester, RSA operated as a multinational general insurer with leadership positions in Scandinavia, Canada, the United Kingdom, Ireland and parts of Latin America. RSA had also been the subject of an earlier approach: in August 2015 it was reported to be close to accepting a takeover offer worth around £5.6 billion from the Swiss insurer Zurich Insurance Group, but no transaction resulted, and Hester continued to lead RSA as an independent company for several more years. In November 2020, the company agreed to an all cash takeover offer from the Canadian insurer Intact Financial Corporation and the Danish insurer Tryg A/S. Hester described the price agreed as reflecting "the 52% premium we were able to negotiate" and said the deal represented "ending a chapter for RSA but not the whole story." RSA shareholders approved the deal in January 2021. UK corporate records show Hester resigned as a director of RSA Insurance Group Limited on 1 June 2021, the date the acquisition completed.

Non-executive and chairmanship roles since 2016

Hester was senior independent director of the FTSE 100 energy supplier Centrica; UK corporate records show his directorship ran from 1 June 2016 to 7 June 2022. He joined the board of the airline easyJet as a non-executive director and chair designate on 1 September 2021 and became non-executive chair on 1 December 2021, a position he continued to hold as of September 2026. He has also served as lead independent director of the technology infrastructure services company Kyndryl Holdings since November 2021. Hester joined the board of the Nordic banking group Nordea Bank Abp in 2022 and became its chairman on 1 October 2022, a position he continued to hold as of September 2026.

Leadership and management style

Across his three chief executive roles, Hester's public statements and his employers' own disclosures point to a consistent approach built around diagnosing the specific causes of underperformance, then executing a sequenced plan of disposals, capital raising and cost reduction. At RSA he set out this method explicitly as a three step process of identifying weaknesses, devising plans and then implementing them, and he told shareholders in 2014 that "the cost of remediation has proven greater than we had hoped, especially in the form of reserving and non-cash charges," while arguing that RSA had funded that cost "through outperformance in divestment proceeds."

At RBS, cost discipline extended to executive pay. The bank's group-wide bonus pool fell from £1,375 million in 2010 to £576 million in 2013, a reduction of roughly 58% over the period, while the pool for the Markets (investment banking) division fell even further, from £937 million to £237 million over the same years, according to the bank's own remuneration committee. Hester personally received no annual bonus in either 2012 or 2013, the final two years of his tenure, as disclosed in RBS's 2013 remuneration report.

Colleagues quoted in a 2015 profile described Hester as a demanding but fair boss who "expects people to do their very best" and lets them know when they fall short, while also appreciating those who make the effort. The fund manager Robert Talbut, then chief investment officer at Royal London Asset Management and head of the Association of British Insurers' investment committee, said at the time of Hester's RBS departure: "I think history will be a lot kinder to Stephen Hester than perhaps some current commentators think. He took over RBS in a distressed situation and has nursed it back to reasonable financial health."

Major deals and strategic decisions

The largest transactions of Hester's career were defensive and restorative rather than expansionary, reflecting the distressed condition of both RBS and RSA when he took charge of each.

At RBS, the central strategic decision of his tenure was the sustained shrinking of the group's balance sheet: a reduction of more than £487 billion in funded assets and more than £1,191 billion in total assets over the five years to the end of 2013, achieved through the disposal of non-core loan books and businesses and a retreat from parts of investment banking. In his final year as chief executive, RBS sold two tranches of its remaining shares in Direct Line Insurance Group, the insurer it had separated from the main banking group, realising gross proceeds of £1,137 million and reducing RBS's residual holding to 28.5% by the end of 2013. RBS also announced the sale of its remaining economic interest in the WorldPay payments business in November 2013, recording a gain of £159 million, accelerated the planned divestment of its United States banking subsidiary Citizens Financial Group, and cancelled an £8 billion contingent capital facility it had held with HM Treasury.

At RSA, Hester's major moves included the £773 million rights issue completed in May 2014, a £400 million subordinated bond issue in October 2014, and a disposal programme that by early 2015 had generated more than £800 million in announced proceeds from the sale of businesses in the Baltic states, Poland, Thailand and elsewhere, with further sales agreed in China, Hong Kong, Singapore, Italy and India. The final major transaction of his RSA tenure was the company's sale in 2021 to a consortium of Intact Financial Corporation and Tryg A/S, agreed in November 2020 at what Hester described as a 52% premium to the prevailing share price.

Financial and market performance

RBS reported a pre-tax loss of £8,243 million for the 2013 financial year, a result driven substantially by £3,844 million of regulatory and conduct redress provisions and £4,823 million of impairments and other losses tied to the creation of RBS Capital Resolution, a non-core asset run-off vehicle that the bank's board approved after Hester's departure from the board on 30 September 2013. Excluding that impact, RBS's underlying operating profit for 2013 was £2,520 million. The bank's core tier 1 capital ratio stood at 10.9% at 31 December 2013, and its risk weighted assets had been reduced to £385 billion.

At RSA, the turnaround under Hester is visible in the company's own reported figures. Tangible equity rose from £1.7 billion at the end of 2013 to £2.9 billion at the end of 2014, a rise of 74%, while return on tangible equity improved from negative 16.7% in 2013 to positive 3.6% in 2014 (9.7% on an underlying basis). By 2020, RSA's final full year as a listed company, group underwriting profit had reached £550 million on an underlying basis, up 36% on 2019, with a combined operating ratio of 91.1%, underlying earnings per share of 51.2 pence, and underlying return on tangible equity of 18.2%, above the company's target range. Tangible equity had grown to £3.27 billion, up 13% year on year. The 2020 business operating result of £751 million was made up of £337 million from Scandinavia, £256 million from Canada and £200 million from the UK and International business. Reporting those results in the early months of the COVID-19 pandemic, Hester said RSA had paid out "some £4.6bn in 'normal' claims whilst also providing for over £250m in COVID-19 specific claims, together with offering a range of other customer support measures."

Board memberships and outside roles

Hester's current outside roles, as of September 2026, are chairman of easyJet plc, chairman of Nordea Bank Abp, and lead independent director of Kyndryl Holdings, Inc. He was previously senior independent director of Centrica plc from 2016 to 2022.

Controversies

During Hester's tenure as chief executive, RBS's turnaround division for distressed corporate borrowers, the Global Restructuring Group, became the subject of sustained public and political criticism. In November 2013, Lawrence Tomlinson, at the time the UK government's Entrepreneur in Residence at the Department for Business, Innovation and Skills, published a report alleging that RBS had used GRG to generate revenue from financially distressed business customers through increased fees, interest margins and the devaluation of assets, based on evidence drawn from several hundred case studies.

RBS's own chairman, Philip Hampton, addressed the allegations in the company's 2013 strategic report, writing that the bank had "faced accusations that our Global Restructuring Group had been culpable of 'systematic and institutional' behaviour in artificially distressing otherwise viable businesses," while stating that "no evidence has been provided for that allegation," and that the episode had "nevertheless done serious damage to RBS's reputation." RBS commissioned the law firm Clifford Chance to conduct an independent review, and the board separately commissioned an independent review of the bank's lending to small and medium sized businesses from Sir Andrew Large. The Financial Conduct Authority also opened a formal skilled person review of GRG's conduct. The period covered by these reviews spans most of Hester's time as chief executive, though the reviews and the resulting public criticism became prominent only as his tenure was ending and afterward.

Hester's pay repeatedly drew public and political criticism during his time at a bank majority owned by taxpayers. In January 2012, an award related to his performance in the 2011 financial year, structured as a provisional maximum allocation of six million shares scaled down to 3.6 million shares based on performance, attracted what RBS's own remuneration report called "considerable attention from the media and politicians." Hester subsequently waived the award, which RBS said he did "because the attention it received had become a damaging distraction for him and the Group." A profile published shortly afterwards reported that, contrary to some contemporary press coverage, neither Hester nor the RBS board had threatened to resign over the government's handling of the issue. The following year, in February 2013, Hester turned down a further bonus, reported at the time as worth around £1 million, awarded to him for his performance in 2012. RBS's own filings confirm that Hester waived incentive awards relating to the 2009, 2011 and 2012 performance years, and record that he received no annual bonus in either 2012 or 2013, the final two years of his tenure.

RBS also took substantial charges during Hester's tenure and shortly after his departure for conduct-related matters including the LIBOR interest rate benchmark, mortgage-backed securities litigation, interest rate swap mis-selling and the mis-selling of Payment Protection Insurance. Chairman Philip Hampton described these as "legacy costs, arising from events and actions in the run-up to the financial crisis of 2008" rather than a product of decisions taken during the restructuring itself. RBS's regulatory and litigation provisions for 2013 totalled £2,394 million, with a further £900 million provided for the year in respect of Payment Protection Insurance redress and related costs.

Personal life

Hester married Barbara Abt, a fellow banker he had met while working at Credit Suisse First Boston, in 1991; the couple have two children. By early 2012 the couple were reported as estranged, and a 2015 profile said they had separated around 2010. UK corporate records list Barbara Jean Abt as company secretary of Broughton Grange Estates Limited, the company associated with Hester's Oxfordshire estate, appointed on 8 February 2000, the same date Hester was appointed a director, with both officers recorded at the same address.

Hester has owned the 350-acre Broughton Grange estate in Oxfordshire since 1992. The estate's walled garden was commissioned from the landscape designer Tom Stuart-Smith in 2001, and the estate's arboretum came to hold some of the first Wollemi pines brought to Britain from Australia. Hester also owns a ski chalet in Verbier, Switzerland.

Philanthropy

Hester was a trustee of the Foundation and Friends of the Royal Botanic Gardens, Kew, a fundraising charity for the Kew botanical collection, from 14 March 2006 to 3 November 2015, according to both UK corporate records and RBS's own disclosures at the time. He has periodically opened the gardens at Broughton Grange to the public for charity fundraising days under the National Garden Scheme.

Recognition

Hester was appointed Knight Bachelor in the 2024 New Year Honours list. The London Gazette recorded the honour as being "for services to Business and to the Economy," describing him at the time as "Chair, Easyjet and Chair, Nordea."

See also

• Royal Bank of Scotland
• RSA Insurance Group
• British Land
• easyJet
• Nordea Bank
• Fred Goodwin
• Ross McEwan

External links

• Official website
• Official website