Amid the prevailing financial shambles around the globe, it is difficult enough to predict what is going to happen tomorrow let alone contemplate how things might look a few years down the line.

Amid the prevailing financial shambles around the globe, it is difficult enough to predict what is going to happen tomorrow let alone contemplate how things might look a few years down the line.

There's many a slip twixt cup and a lip. Much of the overheated broth cooked up by the star banking sector chefs has already been spilled and many people have been scalded, so any long-term projections must be taken with a pinch of salt. Even more so given the mess the real economy is facing.

All of that said, it was heartening to hear the new-broom chief executive at Royal Bank of Scotland envisaging a future in which the institution's success and reputation can be restored.

Stephen Hester, who worked with Luqman Arnold on restructuring Abbey National ahead of its sale to Spanish bank Santander in 2004, told The Herald yesterday that he viewed a sale of Royal to a third party as "unlikely" even when the UK Government unwinds the stake it is about to take.

Rather, he believes Royal can survive as an independent.

This would be unlike the case of nuclear power company British Energy, where the government has brokered a takeover by France's EDF on its way out, but it is good that Hester appears to be thinking about an independent future for Royal. He even went as far as emphasising the differences between Royal and Abbey, notably the very different scale of the banks.

It is also encouraging to hear Hester volunteer that his office will be in Edinburgh, and that he "prizes" Royal's Scottish heritage.

At Royal's current share price of 65.2p, which is marginally below the 65.5p at which the placing and open offer of £15bn of Ordinary stock is pitched, the government looks likely in its underwriting capacity to go a very significant way towards the maximum 58% stake it could end up owning in the Edinburgh-headquartered institution.

The government is also providing a further £5bn by taking Royal Preference shares.

So the Scottish bank, with the UK taxpayer involved so heavily, may not be "independent" in the way it has been in the past. But it will remain an independently-quoted company on the stock market.

And Hester is optimistic that the hold the government will have over Royal, in terms of requirements to lend to homeowners and small businesses in return for its capital, will not conflict with the bank's commercial interests.

He also sees no conflict in adhering to the government's wishes about the way the top brass is rewarded.

Hester said he had found the government to be a "responsible shareholder", during his time as deputy chairman of nationalised mortgage bank Northern Rock.

There is no use pretending, for all of Hester's optimism about the longer-term prospects yesterday, that the immediate outlook for many of Royal's 170,000 staff is anything other than grim.

Hester made no bones about "cost-cutting" being a key part of his attempts to restore the bank to its former glory.

He can for now avoid giving the probable big numbers on job cuts because he does not take up the chief executive post until November 21 (he has been a non-executive director of Royal since October 1).

However, Hester drew a distinction between the situation at Royal and the swingeing job cuts at Northern Rock which had resulted partly because the Newcastle-based bank "was stopping its new business more or less".

Hester said yesterday of Royal: "We want to be cost-competitive. At the same time, we don't want to damage our customer franchises. That will be the balance we need to strike."

So hopefully no baby out with the bathwater then.

Hester was also realistic yesterday, declining in current market conditions to put a probability on Royal being able to sell an insurance division which takes in Direct Line and Churchill.

Although he faces a huge task in evaluating the Royal's position and deciding what to do about it, he has the advantage of going into the top job at a time when the gloom could hardly be deeper.

He therefore has a big opportunity to make his mark.

But Hester, a former investment banker, is well aware of the importance of timing and people's inability to legislate for financial markets.

He volunteered yesterday it was a "sad aspect of life" that businessmen like himself and his predecessor Sir Fred Goodwin were often built up to "more than we are worth" and then knocked down to less than they are worth.

Hopefully, for the sake of Royal's staff and shareholders and the Scottish economy, Hester is built up rather than knocked down as events play out.

HBOS looks, in spite of noise to the contrary, to be heading into the arms of rescuer Lloyds TSB.

Royal, for now, has the opportunity to continue on its own, albeit with the UK government as a very significant and possibly majority shareholder.

Hopefully, when the government removes this crutch, Royal can continue on its own. The importance of Royal's independence to the Scottish economy, with all that such a large headquarters operation brings, must not be underestimated.