With the IT problems now running into the 10th day, Hester has concluded that he will not accept any bonus for this year – even though the amount would not have been decided until next February.
He is the second bank chief executive to waive a bonus for this financial year following the decision by Barclays boss Bob Diamond not to take a bonus in light of the record-breaking £290m fine for the bank's involvement in attempting to manipulate crucial interest rates.
Hester faced a storm of protest about his bonus for 2011 in January when he eventually gave up the share award of nearly £1m following a wave of political outrage. He later said that he had considering resigning but concluded it would be too "indulgent" to do so.
"I think it is inappropriate for me to have a bonus this year. We have let our customers down. That may have arisen from old systems and things that were from before my time, but I think we could reasonably have been expected to have improved things since then and clearly we didn't improve them enough," Hester said.
"So it wouldn't cross my mind to have a bonus this year," he added.
In addition to the computer problems, the bank was today named by the Financial Services Authority in misselling complex financial instruments to small business customers. The bank is also co-operating with regulators over the ongoing investigation into interest rate manipulation that led to the Barclays fine.
More than 900 branches of the Royal Bank of Scotland group, which includes NatWest, will be open again on Saturday as the bank attempts to clear a computer back log that was caused by a software upgrade which went wrong a week ago.
Last weekend, the bank brought in 7,000 staff to open branches as customers found it difficult to access their current account balances and get hold of cash.
Customers are still experiencing difficulties, particularly at Ulster Bank in Ireland which faces a crunch weekend in solving its computer problems.
RBS has not specified how many people have been affected but it has more than 13 million customers across its three brands.
With governor of the Bank of England, Sir Mervyn King, calling for a full investigation into what went wrong, and inquiries from the Treasury select committee, Hester cancelled all the corporate hospitality at Wimbledon where the bank has more than 500 tickets across the fortnight.
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