Hester reveals RBS restructure has cost £38bn

Stephen Hester, chief executive of the Royal Bank of Scotland (RBS), has revealed restructuring costs for the bank have so far totalled £38bn.

Hester (pictured) revealed the huge sum in a staff memo yesterday, days after the embattled chief executive said he would not be accepting a £1m bonus, the Financial Times reported.

The £38bn charge covers the loan losses, disposal costs and restructuring charges the bank has taken since its collapse in 2009.

It is the first time the total cost of the restructure of the bank has been revealed by Hester.

Hester also warned the bank would continue to be loss making for some time.

He said in the memo: "RBS is still in its loss making phase which inevitably gives us communication challenges.

"The losses ironically are a measure of our recovery success. Over the last 3 years we have generated over £33 billion of pre-impairment profits from improving our core businesses in the face of many challenges."

In a rallying cry to staff, Hester also called on RBS employees to "prove the critics wrong" and urged them to be "strong, purposeful and calm" in the wake of the negative publicity faced by the bank.

RBS has been embroiled in media controversy in recent weeks after Hester's £1m bonus package attracted widespread criticism.

Amid the furore Hester decided to waive the bonus.

The boss of RBS was appointed in October 2008 following the removal of Fred Goodwin, and shortly afterwards the bank reported the largest loss in UK corporate history of £24bn.

The UK government stepped in to bail-out RBS with £45.5bn in capital, leaving taxpayers holding an 83% stake.

The full memo to staff can be seen here.