FORMER Royal Bank of Scotland boss Stephen Hester has launched a huge City fundraising as part of his bid to revive More Than insurer RSA.
Mr Hester, who joined the company less than a month ago, revealed the extent of RSA’s difficulties by announcing that operating profits for 2013 had slumped to £286m from £601m a year earlier.
He scrapped the company’s dividend and asked shareholders to stump up £775m in a rights issue - equivalent to 20 per cent of RSA’s market value - in order to repair the insurer’s balance sheet.
The company, which has operations in the UK, Scandinavia and Canada, has been hit by a series of profit warnings, an accounting scandal at its Irish subsidiary and a surge in flood claims following the wettest winter on record.
Mr Hester said yesterday: “RSA’s 2013 results are poor and we need to grasp the nettles of both under performance and under capitalisation.” Mr Hester is being paid an annual salary of £950,000, with the potential for long-term incentive scheme shares worth up to £2.9m this year on top of a potential annual bonus.
He received praise for leading the rescue of RBS.
Mr Hester, who grew up in the village of Crayke in North Yorkshire, left RBS at the end of September after five years at the helm.