Sir Philip Hampton was not the first choice to be chairman of Royal Bank of Scotland and only stepped into the £700,000 job because there was no one else available during the dark days of the banking crisis.
But almost two years into a role that involves juggling the demands of politicians and a public angered by big bonuses, Hampton has developed a reputation for plain speaking, admitting some bankers get bonuses even though they do not deserve them and warning the government that some of its policies might drive firms out of the UK.
As he settles into a white leather chair in a spacious meeting room in RBS's main London office, Hampton adopts his customary no-nonsense tone as he laments the reputation of banks and shares his own sense of horror at what has become of the once-proud industry. His conversation is peppered with references to "reputational" issues at a time when the industry is awash with speculation that bank bosses are trying to strike a deal over bonuses and pouring billions of pounds into David Cameron's Big Society Bank in return for a truce with politicians.
"I can't remember the last time a group of industry leaders had the reputational challenge the bankers do now," he said. "What bothers me is that the reputational damage is quite widespread. There is a lot of collateral damage and to people who have been doing a lot of good work."
Jumping to the defence of RBS's chief executive, Stephen Hester, who was parachuted in during the crisis, he said: "Stephen Hester is a very good example. You can read a newspaper and think he's an overpaid banker but he has come in to sort the problem out.
"He came in when a full-blown crisis was under way and I'm certainly glad he's here. He has collateral damage on pay that isn't justified," he said.
The 57-year-old never intended to be chairman of RBS, a bank that only exists because of a £45bn bailout from the taxpayer after racking up record losses of £28bn in 2008. Hampton was chairman of the supermarket J Sainsbury when the banking crisis broke and took on the part-time role of chairman at UK Financial Investments, the body that looks after the taxpayer's stakes in the bailed-out banks, when he realised he would have to move to RBS.
He is coy when asked whether he was also approached about a senior boardroom role at HSBC around the same time, but frank about the choice he faced when the candidate for the RBS job – former Standard Chartered boss Mervyn, now Lord, Davies – pulled out.
While careful not to confirm he was referring to Davies, Hampton said: "Part of the job at UKFI was to find a new chairman for RBS. There wasn't a long-list of reputationally undamaged bankers and we thought we had identified the right candidate and then he pulled out at the last minute. That was the end of the shortlist."
Although Hampton started his career as an accountant and then spent 10 years as an investment banker at Lazard, his reputation was not tarnished. "I'm not a career banker ... and given I was reputationally undamaged, I got a lot of calls [at that time]."
It is a reputation that has remained relatively unblemished since, although there have been a few dents. One was his decision to become a non-executive at the mining firm Anglo American, which some commentators feared might distract him from sorting out RBS. Another was a row with the government over bonuses, when RBS took more taxpayer support from the Asset Protection Scheme.
Despite all of his business experience – as a dealmaker, finance director of British Steel aged 37 and an explosive period as finance director at Lloyds before joining Sainsbury's – Hampton has never been a chief executive, the key job in any organisation. It seems he has never sought the role. "I like the challenge of the jobs I've done and the only job I know is working in big companies. I like to think I can make a contribution to making them better. But I don't like a personal profile and generally speaking it's not consistent with the role of the chairman."
After a pause, he added: "In fact, the more I think about it, I don't know why I'm doing this interview."
Perhaps it is because he was recently dubbed the "acceptable face" of banking after one of his frank admissions about the pay deals on offer in the City. He is also keen on his privacy, admitting he is rarely recognised, before recounting a tale about being spotted on the "drain" – the Waterloo & City line on London's tube – by a fellow traveller who noted how bad times must be if Hampton was resorting to such a mode of transport.
This is typical Hampton: down to earth (he insists his only luxury is a yacht soon to be transferred from its mooring in Menorca to the south coast of England) and a good raconteur. He recalls that his deal-making days were full of brutal negotiations in the early hours of the morning and tough talking. He describes how during one early-morning negotiation the late entrepreneur and Blackburn Rovers owner Jack Walker jumped on to a lawyer's desk with his trousers down to declare: "You've taken everything off me, I've got nothing else."
Hampton reckons that the City has changed since his days as a corporate financier in the 1980s, when a handful of people got bonuses, which were not as large as they are today. "The big bonuses have spread to thousands of people around the globe and particularly with the poor shareholder performance, that is what is so puzzling about it."
Bonuses, he said, would be down this year. "I made a mistake over a year ago when I said it was time we ended the public flogging. I was too soon."
RBS's share price was just 9p when he arrived in January 2009, three months after Hester had been parachuted into replace Sir Fred Goodwin. The shares are currently being battered by anxiety about the bank's exposure to Ireland.
Insiders credit Hampton with convincing Goodwin to agree to halve the £700,000-a-year pension he had been handed on his departure. Hampton does not see it that way. "I did the negotiations with him. I gave him my views but what was decisive in his thinking I don't know," Hampton said.
The fact that Goodwin and other bankers at RBS have not been censured by the Financial Services Authority puzzles observers of the industry who feel that someone should be blamed for the near death of RBS. Hampton makes it clear that from his point of view "what happened was a series of major misjudgments about lending decisions and the acquisition of ABN Amro, but these are [just] very big bad business judgments. They are not acts of criminal vandalism," he said.
Hampton notes that shareholders voted for the ABN Amro takeover, which left the bank with a wafer-thin capital cushion, and that the FSA had permitted RBS to run on a very low capital base.
Even in 2004 capital had been an issue for Hampton, who fell out with the board of Lloyds, also bailed out by the taxpayer, when he felt the bank should cut its dividend if it wanted to keep expanding. He is careful not to claim credit for foreseeing the crisis that was to befall the industry but makes a key point. "What is interesting, on reflection, is how comfortable everyone was with the notion that banks were somehow indestructible," he said.