Ten reasons to join RBS

According to Stephen Hester, recruitment is the 'single biggest problem at RBS.' Yesterday he said that the top performers he'd like to hire are being put off by the likelihood they'll be "criticised" over pay and "judged on different rules," despite having a "more difficult job."

To help make Hester's job easier, we've spoken to headhunters currently working for RBS and assembled a list of reasons why you may want to work directly beneath the nostrils of the British Treasury. They are as follows: -

1) It's hiring

Having lost 1,000 people from its global banking and markets business up to July 2009, RBS is in rebuild mode. There are rumours that it's desperate to hire, particularly in equity research. One headhunter says they're hiring, "across the board in equities, fixed income and capital markets."

Late last year, RBS lost two of its most senior bond syndicate bankers to Santander.

2) One day, it will be profitable again

RBS may have been a basket case for the past 18 months, but this doesn't mean it will always be so. Hester said yesterday that the RBS recovery is ahead of plan, that he's encouraged he can hit all the "ambitious targets" set for the bank, and that he expects it to return to profit in 2011.

"It's a recovery story," says one headhunter. "If you're going to get paid in shares, you could end up doing pretty well."

Hester himself will only be able to draw on 60% of his 10m payout if RBS shares reach 70p by around mid-2011; they're currently valued at 35p.

3) The pay isn't really that bad

As we pointed out long ago, RBS is actually paying quite generously this year. Many of its global banking and markets staff will receive 50% of their bonuses in paper which vests immediately.

"They are being competitive about how they people," says one headhunter. "They're just not able to do two year deals."

4) People who stick around are committed to making it happen

This is a bit of a feel good reason, but it's one that one headhunter tells us he's using. "The people who stay at RBS are energized to make it work," he says. "They're getting the right people on the bus and the wrong people off the bus."

5) They're still strong in their core businesses

RBS is known for having a good rates and FX trading operation. Last year it garnered a whole host of awards in areas like sterling bonds, equity derivatives and structured products. It also increased its share of European investment banking fees from 3.7% to 4.4%.

6) It's got a balance sheet and it's willing to use it

Having once had a balance sheet 15 times the size of Scottish GDP, RBS has been obliged by the EU to cut back. It's either divesting or has divested things like insurance, commodity trading and transaction management, and has 167.4bn of toxic assets covered by the UK's asset protection scheme.

According to Hester, the bank is now two thirds of the way through its balance sheet restructuring. However, its diminished firepower hasn't prevented accusations that it's used its balance sheet to bully clients into doing business by threatening to withdraw funding unless they use its advisory services.

7) It's hired some good people

Allied to point number four, RBS is doing its best to put a new team in place. Late last year, it hired a new head of UK restructuring and a new head of European rates strategy. Earlier in the year, it also hired Antonio Polverino and various others on generous packages from Merrill Lynch.

8) All the key decision makers are based in London

Now that Barclays is in bed with ex-Lehman staff in the US, few banks can genuinely claim to have all their key decision making types in the City. RBS can, however. "The global heads of investment banking, equities and fixed income are all in London," says one headhunter.

9) It won't be owned by the government forever

One day, RBS may be independent again. Yesterday, Hester said RBS should be on course to return a profit to the Treasury when the time comes.

10) It's not Lloyds

If you're considering joining RBS, you may also be considering the charms of Lloyds Corporate Markets. Arguably, RBS is best.