Government's key man takes top RBS job
RBS announced the appointment late yesterday as the Edinburgh-based institution's shares sank to an all-time low amid speculation over further government action to save Britain's beleaguered banks.
Hampton, who will remain chairman of supermarket giant Sainsbury's, takes the post of deputy chairman of RBS on Monday. He will replace Sir Tom McKillop as chairman of the bank at its April AGM.
His appointment, which follows that of Stephen Hester as chief executive late last year, means that for the first time the two most senior posts at RBS will be held by non-Scots.
Hampton yesterday stepped down as chairman of UK Financial Investments Ltd (UKFI), the company set up to manage the government's 58 per cent stake in RBS and other banks subscribing to its recapitalisation fund.
He will now play an major role in choosing three new non-executive directors for the Royal.
Formally, the three will be appointed by the bank but, given his experience at UKFI, Hampton's involvement will be seen as putting the government's stamp on the new board members.
Hampton said: "Having been closely engaged in the issues facing banks at present from a UKFI perspective, I am pleased to be taking on this central role at one of the world's most important financial institutions."
John Kingman, chief executive of UKFI, said the organisation was "sorry to lose" Hampton.
"However, having the right chairman at RBS is in all our interests and he is an outstanding candidate for the job so his appointment has our full support," Kingman said.
McKillop said Hampton's "distinguished business track record combines well with a deep financial services background".
The government now owns 58 per cent of RBS, and 43 per cent of the new Lloyds Banking Group which has taken over HBOS.
Yesterday's news came as RBS's shares sank 13 per cent to 34.7p – an all-time low. The stock has lost 40 per cent this week.
City traders said Barclays and RBS had been caught in the transatlantic shadow cast by major Q4 losses posted by Citigroup and Bank of America.
Barclays's shares closed down just under 25 per cent at 98p.
There was also speculation that the two had been hit by the ending yesterday of the ban on short-selling.
The new decline in British banks' share prices was last night also seen as increasing the pressure on the government to launch its "bad bank" plan, potentially spending billions of pounds buying up the banks' toxic assets and ringfencing them.
SIR Philip Hampton's banking experience spans two years at Lloyds TSB as group finance director from 2002 and a stint as executive director of investment bank Lazards from 1981 to 1990.
Prior to his Lloyds TSB appointment, he was finance director at a range of companies, including BT, British Gas and British Steel.
He was appointed as Sainsbury's chairman in July 2004, on a salary of 395,000 in 2007-8. He has been partially credited with a turnaround of the supermarket's fortunes.
After taking the position at Sainsbury's, Hampton restructured the board, brought in a new incentive scheme and saw off a number of takeover attempts.
Late last year, Chancellor Alistair Darling appointed him chairman of UK Financial Investments Limited, the company which manages the government's shareholding in banks – including RBS. He resigned from this post yesterday.
Hampton also sits on the board of Belgian telecoms group Belgacom.