State-rescued Royal Bank of Scotland (RBS) promoted New Zealander Ross McEwan, its head of retail business, to chief executive yesterday when it also announced a return to profit.
RBS, 81-percent owned by the British taxpayer, said that McEwan would take charge from October, replacing Stephen Hester, who recently announced he would step down before the bank returned to the private sector.
“The Royal Bank of Scotland Group PLC announces today that Ross McEwan has been appointed as a director and group chief executive with effect from 1 October 2013,” the Edinburgh-based bank said in a statement.
McEwan, 56, will receive an annual salary of ￡1 million (US$1.5 million). He will receive also a cash allowance in lieu of a pension totaling 35 percent of his salary.
While he is eligible to receive a long-term incentive award next year, McEwan does not wish to be considered for an annual bonus next year or for the remainder of this year, the statement said.
RBS announced that it had posted a net profit of ￡535 million in the six months to the end of June compared with a loss after tax of ￡2 billion in the first half of last year.
“Five years on from its rescue, RBS is now a safe and strong bank. Our focus is now on building a really good bank for our customers and shareholders, returning the bank to private ownership and playing our full part in supporting the UK economy,” RBS chairman Philip Hampton said yesterday.
“The board and I very much look forward to the fresh perspective Ross will bring to achieving these goals. I would like to thank Stephen Hester for his dedication to RBS and congratulate him on his success in turning this bank around,” Hampton added.
McEwan, who joined RBS as head of its retail banking operations in September last year, said it was “a privilege to lead a bank that matters to so many.”
“We have a lot of work ahead of us and I’m very much looking forward to getting started,” he added.
Current RBS chief executive Hester surprised markets in June by announcing that he was stepping down later this year.
His departure, reportedly at the request of Britain’s coalition government led by Prime Minister David Cameron, has sparked questions about the strategy for the state-rescued bank.
Analysts believe that British British Chancellor of the Exchequer George Osborne wanted a new face to help guide the bank’s return to private ownership, which is not expected until late next year at the earliest.
RBS was rescued with ￡45.5 billion of British taxpayer cash at the height of the 2008 global financial crisis under the then-Labour government, making it the world’s biggest-ever banking bailout.
“RBS’ journey from ‘bust bank’ to ‘normal bank’ is largely done,” Hester said in yesterday’s earnings statement.
“But no small task remains — to harness the energies and strengths that have driven the bank’s recovery, and to take RBS towards the target of being a ‘really good bank’ for customers, shareholders and society as a whole,” he added.