Royal Bank of Scotland boss Stephen Hester will step down later this year, after the bank's board decided it wanted new leadership to oversee the sale of Britain's majority stake in the bank, which could take years.

Hester said on Wednesday he would have liked to carry on at the helm for the start of sale of the government's 81-percent stake, which could take place before the next election in 2015.

However, the bank said the 52 year old had been unable to make an open-ended commitment to remain as chief executive, having held the role for five years, and that the board believed a change at the top now would give the new CEO time to prepare for the government sale and lead it in the years following.

Hester has been praised by the government and investors for restructuring RBS by slashing risky assets and costs, in a drive which he dubbed the "biggest turnaround in corporate history".

RBS's underlying profit nearly doubled to 3.5 billion pounds last year, the highest since its bailout, although a 4.6 billion pound change for losses on the value of its own debt drove it to a pretax loss of 5.2 billion pounds

The list of potential successors is likely to be short given the task of dealing with regulators and politicians. Richard Meddings, finance director at Standard Chartered has been tipped as a potential successor.

Hester will receive 1.6 million pounds when he leaves, representing 12 months pay and benefits in line with his contract. He will not receive a bonus for 2013.

Presented by Adam Justice