By Cara Sulieman
THE under pressure Chief Executive of one of Scotland’s biggest banks has written an open letter to his customers in an attempt to reassure them.
Stephen Hester, Chief Executive of the Royal Bank of Scotland, placed his letter in national papers yesterday in order to boost consumer confidence.
In it he named a number of products designed to stimulate the property market and “help you through the next year.”
He wrote: “One of my urgent priorities has been to rebuild our traditional relationships with our customers in Scotland by providing you with practical help in these challenging times.”
This involves creating £1.7 billion worth of new mortgages in 2009, offering 90% mortgages, and giving borrowers six months to catch up with repayments before repossessing the property.
It also boasts about MoneySense, a scheme run by the bank to give advice on managing money, something that they think is important during the credit crunch.
A spokesman said: “Our customers want back-to-basics banking, building on traditional relationships with local branches, and access to impartial advice, helping them navigate their way through the challenges of the current economic climate.”
Risking personal finances
But despite making these promises through the advertising campaign, Hester is not putting his own finances on the line.
It has been revealed that he, along with his fellow board members, will not be buying any shares in the new issue being undertaken by the bank at the moment as a result of the latest cash boost from the government.
In an attempt to boost share prices and raise capital, the bank are offering current shareholders the chance to buy shares at 31.75p each.
But with the share price on the open market at a meagre 22.7p, it is a raw deal for investors.
In sharp contrast, Sir Fred Goodwin and his colleagues bought a number of shares at a personal financial loss late last year when the bank was previously given a cash injection by the government.