Royal Bank of Scotland is in late-stage discussions with regulators at the Bank of England to appoint insider Ross McEwan as the part-nationalised lender’s new chief executive.
Mr McEwan, a New Zealander, was drafted in as RBS’s head of retail banking last summer as the group moved to reinforce its credentials on the UK high street.
Previously in a similar role at Commonwealth Bank of Australia, Mr McEwan is seen as a safe, politically acceptable choice to succeed Stephen Hester, the former investment banker who was ousted as chief executive last month after pressure from the Treasury. Mr Hester was appointed in late 2008 to turn round the bailed-out RBS.
RBS chairman Sir Philip Hampton, aided by Anna Mann’s MWM headhunting firm, has run an accelerated international search for a replacement over the past month. But after Blackrock’s Mark McCombe, the leading external candidate, dropped out of the race last week, the focus has shifted back to internal succession.
Mr McEwan’s selection as the preferred candidate was discussed at an all-day board meeting on Wednesday, though regulators at the BoE’s Prudential Regulation Authority have yet to sign off on the choice, according to two people familiar with the process. Assuming he is approved, his appointment could be announced as early as Thursday, or alongside RBS’s second-quarter results on Friday.
One person close to the recruitment process cautioned that if any problem arose with Mr McEwan’s selection, the current finance director, Bruce van Saun, remained a fallback candidate.
Mr McEwan is “as close as you could get to a carbon copy of Antony Jenkins”, according to one associate – a reference to the retail banker appointed at Barclays with a mission to clean up the bank in the wake of hard-charging investment banker Bob Diamond. However, he lacks direct experience of investment banking or running a whole company, which some believe may concern the PRA.
Fans of Mr McEwan say he is a straightforward banker who would send the right signals about RBS shifting away from investment banking operations and focusing on the group’s more politically palatable retail franchise.
As a recent arrival in Britain, however, the New Zealander has few political or regulatory contacts, so may find it tough to pilot RBS through the next few months. Among many issues, the group is facing a potential split into a “good” and “bad” bank at the behest of the Treasury, and will need to negotiate with the government and with the European Commission over a series of state-aid issues.
Mr McEwan has kept a low profile in his first year at RBS, though in a signal of his blunt approach he told investors in March. “I have been quite surprised by how bad this industry is. There is not a great retail bank in the UK.”
One of the challenges RBS will have experienced in courting external applicants for the chief executive job is the prospect of critical scrutiny from politicians and the general public of pay and bonuses. Bankers pointed out that promoting an insider to the role mitigates that problem.
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