Royal Bank of Scotland, which is 70 per cent-owned by the taxpayer, has lost “hundreds of people” from its investment bank after concerns at the prospect of future government interference, its new chief executive said on Friday.

Stephen Hester, who took over from Sir Fred Goodwin last year, warned on Friday that he saw no “green shoots” of recovery and that the outlook would remain “very tough” for RBS in 2009 and 2010.