Sir Fred Goodwin, one of the most powerful bankers of the past decade, is expected to be out of a job within days — possibly hours — as the price for a state rescue of the Royal Bank of Scotland.

His departure as chief executive would be the highest-profile scalp of the banking crisis in Britain, which, unlike the US, has seen few executives fall on their swords.

Sir Fred’s chairman, Sir Tom McKillop, a well-known Scottish businessman with little obvious experience in banking, is also expected to go.

Sir Fred, who has been in the job for eight years, let it be known late last week that he was prepared to depart if this were felt necessary to secure an injection of fresh capital. The Government’s decision to take control of the bank at the weekend is thought to have made his position untenable.

His replacement is widely tipped to be Stephen Hester, chief executive of the property group British Land and a non-executive director of RBS.

Sir Philip Hampton, chairman of Sainsburys and a former finance director of Lloyds TSB, is regarded as the natural replacement for Sir Tom as the RBS chairman.

There are also question marks about the future of Andy Hornby, the chief executive of HBOS, as it attempts to rescue its merger with Lloyds TSB.

Sir Fred’s departure raises a difficult problem for the Government. He was paid £1.2 million in basic salary last year, and the terms of his contract are likely to include a guaranteed payoff of at least this amount.

There may be attempts to persuade him to sacrifice this payment to avoid embarrassment.

The positions of these two, and other RBS executives including its chairman of Global Markets, Johnny Cameron, have been under scrutiny since the group was forced to raise £12 billion from investors earlier this year. The bank is one of the most exposed British institutions to the sub-prime loans crisis and this year has already written off almost £6 billion from credit crunch-linked investments.

After raising the £12 billion, shareholders said that Sir Fred would need to step down if the bank sought to raise more cash.

Up to now the only senior British banker to depart has been Adam Applegarth, the former chief executive of Northern Rock. Though known widely in his native North East, Mr Applegarth was not a significant player on the national stage.

By contrast, in the US a number of senior bankers have paid for their folly with their jobs. Several are being investigated by the criminal authorities.

Sir Fred relished his nickname, “Fred the Shred”, which was bestowed for his ability to cut costs, and therefore jobs, after merging the bank with others. He came to prominence in 2000 with the acquisition by RBS of NatWest, seen as a textbook integration and one of the most successful banking deals.

He was raised in Paisley, the son of an engineer and joined the accountants Touche Ross after studying law at the University of Glasgow. He entered the banking world in 1995 at the National Australia Bank and became deputy chief executive of its Clydesdale subsidiary.

He joined RBS in 1998, two years before the £22 billion NatWest deal. It was a hostile bid, unusual in banking because it can lead to the departure of key staff. In 2004 RBS bought the insurance company Churchill.

It was the purchase of the Dutch bank ABN Amro last year that was a deal too far. Sir Fred and RBS pushed ahead with the purchase in summer 2007 even though it was already becoming apparent that all was not well with the world banking system.

RBS led a consortium that paid a colossal €72 billion. This put a strain on RBS finances at a time when the market was becoming nervous over heavily indebted banks.

A year later calls for Sir Fred to go were deafening. It is unlikely that he could have survived, even without government intervention in RBS.

The life and times of Sir Fred Goodwin in numbers

Age 50

Studied law at the University of Glasgow

Became partner of Touche Ross, the accountant, aged 29

Chief executive of RBS since 2000

Knighted 2004

Hobby: restoring vintage cars

Salary last year £4.2 million (inclucing £2.86 million performance bonus)

Pension pot: £8.37 million

RBS Profits last year: £10.3 billion

Customers: 40 million in 53 countries

Employees: 226,400

Cost of new Edinburgh headquarters, opened in 2005: £350 million

Acquisitions since 2000: 26

Bought ABN Amro for £48 billion last year

Bought NatWest for £21 billion in 2000

Jobs cut after NatWest takeover: 18,000

Cash raised from rights issue in April: £12 billion

Write-offs this year: £6 billion

Share price one year ago: 560p

Share price on Friday 72p

Market capitalisation: £11.8 billion

Source: Times database

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