LONDON (Reuters) – Royal Bank of Scotland is searching for a new chief executive after Ross McEwan resigned, signaling a fresh start as it heads for full private ownership after a state bailout.
FILE PHOTO: Royal Bank of Scotland chief executive Ross McEwan is seen outside Downing Street in London, Britain March 20, 2019. REUTERS/Hannah McKay/File Photo
New Zealand-born McEwan, who has led RBS since October 2013, has a 12-month notice period and will remain in his position until a successor has been appointed and an orderly handover has taken place, the bank said on Thursday.
It is the second change in RBS’s senior executive team in fewer than six months following the appointment of Katie Murray as the bank’s chief financial officer last December.
The date of McEwan’s departure will be confirmed in due course and Alison Rose, the bank’s CEO of Commercial & Private Banking, is seen as one of the favorites to succeed him.
Rose, who also serves as deputy CEO of NatWest Holdings, has worked for the lender for more than 20 years and is responsible for RBS’s Coutts private banking brand.
Rose’s accession would make RBS the first bank in Britain to have two women in its most senior positions at the same time.
“After over five and a half very rewarding years, and with the bank in a much stronger financial position it is time for me to step down as CEO,” McEwan said in a statement.
There had been speculation about McEwan’s future since finance chief and fellow New Zealander Ewen Stevenson announced he was leaving last May.
Some analysts suggested the CEO’s departure might not be ideal timing for the bank, just months before Brexit and with dark clouds looming over the UK housing market.
“We are disappointed by this news. RBS’s key financial target is delivery of 12 percent-plus “all-in” return on tangible equity next year, that is by any stretch demanding,” analysts at KBW said in a note.
“Ross was adamant that the target would be delivered. Without his drive, the question must be far more open.”
Shares in the bank were trading down 1.3 percent to 253.4 pence by 0745 GMT.
RBS is due to report its first quarter results on Friday where attentions will turn to the resilience of its small and medium-sized business borrowers in the face of Britain’s lengthy exit process from the European Union.
While broadly liked and respected among RBS’s institutional investors, McEwan’s tenure has not been without drama.
Despite being one of the lowest in Britain’s banking sector, salary and bonus payments earned by the 61-year old have attracted considerable scrutiny, particularly in the years before RBS returned to profit.
McEwan’s total remuneration was 3.58 million pounds in 2018, 97 times the pay of the bank’s median employee and 143 times its lowest paid staff.
Under his watch, the bank also shelled out $4.9 billion to settle its largest-ever regulatory penalty for misselling of high-risk mortgage backed securities between 2005 and 2008, when it was one of the world’s biggest banks by assets.
But a tight rein on costs has seen the lender swing back to the black and restore dividends to investors. RBS has also managed to amass hundreds of millions of pounds in excess capital it hopes to deploy in buying back shares from the UK government this year.
RBS, currently more than 62 percent owned by the UK taxpayer, is hosting its annual meeting on Thursday, where it is expected to field fresh questions over its controversial Global Restructuring Group, which ensnared hundreds of troubled borrowers in the financial crisis.
RBS itself was bailed out by the UK government to the tune of 45 billion pounds ($58 billion) in 2008 and has spent the last decade cutting costs, restructuring its balance sheet, and refocusing on core domestic UK business and consumer lending.
Reporting By Sinead Cruise; Editing by Huw Jones/Keith Weir