Royal Bank of Scotland chief executive Stephen Hester
Royal Bank of Scotland chief executive Stephen Hester

The chief executive of the Royal Bank of Scotland (RBS), Stephen Hester, has admitted that he did not accept his million-pound bonus for "risk of the public furore" that would have followed.

Hester, speaking to the media for the first time since he refused his bonus, said he had considered resigning amid the political storm.

But he said he believed it was essential to defuse the "timebomb" of the bank's balance sheet for the benefit of the taxpayer.

"In the end, I came to the conclusion that it would be indulgent for me to resign," he told BBC Radio 4's Today programme.

Hester said the bonus - to be paid in bank shares - was damaging to the bank and the industry as a whole.

"I took the judgment that it was going to be damaging for RBS to stay in the intensity of the spotlight that we had got into," he said.

While he said he had "great sympathy and understanding" for people concerned about the high rewards in the banking industry, such "societal issues" were ultimately a matter for politicians.

He said it was essential that RBS was able to recruit the best people to resolve the problems it had inherited from its former management, which led to it being bailed out by the taxpayer.

"When I was asked to take on this job three years ago, I had to replace the whole senior management team of RBS," he said.

"We had to go around the world looking for the best people, not just people to run a bank well, but people to defuse the biggest timebomb in history in terms of bank balance sheets.

"Those people are doing a good job. They deserve recognition. If they do a good job, it is our task to make sure that there is a connection between the job people are doing and how they get treated."