RBS falls after finance chief quits

Shares in Royal Bank of Scotland took a tumble after the surprise decision by finance director Nathan Bostock to quit the group just two months into the role.

4be4a0be-6260-11e3-bbd3-0a0c0223000020131212T101143
Royal Bank of Scotland shares have fallen after finance director Nathan Bostock announced plans to step down just 10 weeks into the job.

Shares in Royal Bank of Scotland took a tumble after the surprise decision by finance director Nathan Bostock to quit the group just two months into the role.

RBS fell 3% after Mr Bostock told the state-backed bank's board he was leaving to join Santander UK as its chief risk officer and deputy chief executive.

His departure came as another blow to long-suffering investors, with the group among the top blue-chip fallers, down 9.8p to 326.9p - on a day when the FTSE 100 Index was dragged 15.6 points lower to 6507.7.

The fall followed the trend on New York's Dow Jones Industrial Average where, despite a deal struck by legislators in Washington on the US budget, next week's all-important meeting of America's central bank cast a shadow.

Markets in France and Germany were also in the red at the end of the session.

The pound fell as remarks by Bank of England policy maker Martin Weale about a sharp fall in inflation made it seem less likely that interest rates would need to be lifted to bring the rate down.

Sterling dropped a cent against the greenback to 1.64 US dollars and a cent against the single currency to 1.19 euros.

The Capitol Hill budget agreement did help some London stocks with US government defence contracts - notably BAE Systems, which climbed more than 2%, or 10.6p to 426p, and Rolls-Royce, up 12p to 1204p.

On the FTSE 250 Index, Chemring rose 3.2p to 209.6p.

But mining stocks were hurt by the uncertainty over whether next week's US Federal Reserve meeting will see it start to ease back on the country's multi-billion dollar monthly programme of quantitative easing.

Randgold Resources was 90p lower at 4051p and Anglo American dipped 22.5p to 1293.5p.

RBS was joined on the fallers board by part-nationalised rival Lloyds Banking Group, which was down 0.8p at 77.4p after it was fined £28 million for serious failings in its staff bonus schemes.

The Financial Conduct Authority said a lack of control of incentives for advisers within Lloyds TSB, Bank of Scotland and Halifax risked customers being sold products that were unsuitable or not needed.

Outside the top flight, shares in transport company FirstGroup rose 5% after it emerged that one of its shareholders had called for the group's US operations to be spun off.

Sandell Asset Management, which owns 3.1% of the company, said the boost to its balance sheet should enable it to invest in upcoming UK rail franchise bids and the turnaround of the UK bus business.

FirstGroup said the proposals were not compelling and contained structural flaws but with Sandell pledging to lobby other shareholders the break-up speculation helped shares jump 5.6p to 121.6p.

The biggest FTSE 100 risers were easyJet, up 41p to 1481p, BAE Systems, up 10.6p to 426p, Sports Direct up 14p to 771p and Petrofac up 19p to 1189p.

The biggest FTSE 100 fallers were Mondi, down 34p to 941p, Royal Bank of Scotland down 9.8p to 326.9p, Randgold Resources down 90p to 4051p and Anglo American down 22.5p to 1293.5p.