Scottish banking chiefs quit

It was really a question of when, rather than if, the top brass at Scotland's largest banks would step down after the escalating problems of recent weeks. Within minutes of one another, both the chief executives and chairmen of Royal Bank of Scotland (RBS) and HBOS resigned after the banks accepted a 37bn government bailout.

Last week, RBS denied that it was looking for a replacement for chief exec Sir Fred Goodwin, but Stephen Hester, currently head of British Land and former Credit Suisse chief financial officer, is already being touted as a shoo-in.

Andy Hornby, chief executive of HBOS, has also resigned from his post. It's a dark day for the Scottish banks, which have ceded majority control to the government after accepting a 37bn injection of new capital.

RBS chairman Tom McKillop is to retire and Lord Dennis Stevenson, the chairman of HBOS, has also stepped down.

Goodwin, who has headed RBS for over nine years, earned the nickname 'Fred the Shred' during his tenure as deputy chief executive of Clydesdale bank because of his cost-cutting abilities. This reputation was further enhanced after RBS's audacious 22bn hostile takeover of rival NatWest in 2002, which eventually resulted in 18,000 job losses.

Goodwin's acquisition spree propelled the bank from being a relatively small player to the UK's second biggest bank, with a headcount of 19,000 in Scotland. However, the RBS-led consortium which took over ABN AMRO for a massive €72bn in 2007 was a strain too much on the bank's finances shortly before the market downturn.

Hornby took the helm at HBOS in 2005, at the tender of 38. He'd gained reputation as a 'boy wonder of banking' after turning around the fortunes of HBOS's retail business, and his appointment was met with a buzz of excitement.

Some argue that he's been unlucky this year after an ever-increasing list of horrors affecting the Scottish bank, including malicious market rumours, a bungled 4bn rights issue and a proposed takeover by Lloyds TSB. However, before joining HBOS in 1999, Hornby worked in various director roles at Asda, and critics say the downturn exposed his lack of banking experience.

The positions of the two executives were increasingly regarded as untenable, and calls for their resignation peaked last week amid slumping share prices and rumours of nationalisation.