Bankers’ bonuses remain a “global market issue” while RBS’s Stephen Hester probably has one of the most difficult jobs in the industry, according to a Midland-based RBS boss.

Andrew Harrison, managing director for corporate banking for Royal Bank of Scotland across the Midlands and East of England, said that the recent furore about Mr Hester’s £1 million bonus overlooked the good work he had done for the bank.

“If you look at the progress we have made as an institution since 2008 and the repositioning of the bank in being more safe and secure – that has been achieved by strategic decisions taken by Stephen Hester,” said Mr Harrison.

“Most professional commentators have been hugely positive about that. We as an organisation and the country are being well served by Stephen Hester. It is probably the most challenging job in financial services.”

Mr Harrison said he believes the row over the RBS chief’s bonus and pay is a matter for the global banking industry.

“What is the right level of reward for that? To a certain extent that is a global market issue not set by me but what the market says remuneration for this kind of role should be,” he said.

“The cultural change we have gone through has been huge, and hugely positive, and many of our clients understand that.

“We are a much safer institution and that has much to do with the strategy since Stephen Hester joined us. You can see the direction of travel. He has got us to a position where we are probably one of the best banks within Europe.”

As far as public ownership is concerned Mr Harrison acknowledged it saved the bank at its low point but said it is still an interim measure.

“If it wasn’t for the support of the UK Government we probably wouldn’t be sitting here having this conversation today,” he said. “That relationship is incredibly important, as with any shareholder it’s important to ensure we look after a shareholder’s interest.

“Our aims are about making RBS a much safer institution, serving clients well and a return to private ownership. The first two are of equal importance.

"We need to be a safe institution and we are a safe institution now. We need to serve clients well. If we do that there will come a point in the future when, because of the stockmarket being much more positive and regulation having bedded in, that a return to private ownership becomes possible. It is very difficult to see when that will be. It is some way off.

“Does it impact upon the way we do business or our ability to serve our clients? No, not at all.”

On a more local level, Mr Harrison, who has been based at RBS’s Birmingham office for seven months and spends between 60 and 80 per cent of his time there, says he has been impressed by the city but feels it should be more vociferous about the things it does well.

He said: “I have been incredibly impressed with how good the story is here in Birmingham – the level of investment in infrastructure and big aspirations in the public and private sectors in terms of where they want to take the city have given me huge optimism.

"People in Birmingham are quite humble. It feels to me we don’t shout about the great things we are doing probably as much as other areas. We should be more confident about it as there is a fantastic story to tell. This is a great place to be, a great place to do business.

“It has got all the benefits of a big city but also all the benefits of a close community. What a great message to take internationally. It is certainly one I am carrying with me.

“It is incumbent on all of us talk as ambassadors and get that message out.”

Mr Harrison, who deals with businesses turning over £25 million or more, said he sees his role in the region as one that involves “unlocking opportunity” and “finding companies that want to grow, sitting down with them and working out the best way to achieve that”.

He added: “I want to get a good understanding of companies and to understand strategically where they want to get to. To match that to our capabilities and help them move forward on their journey.”

He is also upbeat about the state of the economy generally, and said: “We have to be careful that we don’t talk ourselves down. You can’t argue with the economic statistics but all I can say is working with businesses on a day-to-day basis I see many more signs for optimism, particularly in this region.

“What we have to do is collectively instil more confidence in those businesses so they invest equity and debt into new projects.

“Undoubtedly there are big economic headwinds in terms of GDP growth and the eurozone – big issues you can’t get away from.

“But what we see is that many of our clients are doing very well, getting their heads down and doing business.

“Are they confident enough to be investing? Probably not. Businesses are deferring investment decisions to see which way the economy and Europe are heading. The role we have got to play is to talk proactively to businesses that are doing well but are a bit nervous about the future and where they would like to grow. Through our knowledge we should be able to help them.

“On the ground I think it is a lot more positive than it looks in the economic data.”

On lending, Mr Harrison feels RBS is doing all it can and is dismissive of accusations that banks, and RBS in particular, are reluctant to do so.

“From a national perspective in terms of corporate banking we have exceeded our Merlin commitments to the UK Government,” he said.

“From that perspective we have done everything the Government has asked of us in terms of supporting business in the UK.

“As far as lending to the SME market is concerned, for every pound lent in the last year RBS has accounted for 40p of it.

“Compared to our market share of 25 per cent we are quite clearly punching above our weight when it comes to lending. Would I like to do more? Yes I would.

“My strategy is of working much harder to identify the businesses out there that have investment plans, getting in front of them and helping to pull those plans together and arrange lending around it. We very much want to help more companies. My strategy is a growth one. We want to do more business, get more clients and we can only do that if we are willing to lend money.

“The worst thing that can happen is that businesses stop speaking to the banks because they’re nervous about how banks will react or because they think the banks are closed, and I don’t think either of these are true.”