Bailed-out RBS names New Zealand's McEwan as replacement CEO
Stephen Hester reported his last set of results for bailed-out Royal Bank of Scotland on Friday as he prepares to hand over the reins to New Zealander Ross McEwan.
The state-controlled bank recorded a first-half profit of $811 million, compared with a loss of $3.2 billion in the same period of last year.
RBS on Friday named McEwan, a 56-year-old native of New Zealand, as CEO effective Oct. 1.
The Scottish bank owns RBS Citizens Financial Group, the parent of RBS Citizens Bank of Pennsylvania, which may be partially sold in a public stock offering next year.
Hester, 52, became CEO in October 2008 as the government rescued the bank with a $71 billion capital injection. Fred Goodwin, Hester's predecessor, brought the bank to near-collapse with an aggressive global expansion, which included the ill-fated purchase of Dutch lender ABN Amro.
RBS is now 80 percent owned by British taxpayers.
“RBS's journey from ‘bust bank' to ‘normal bank' is largely done,” Hester said in a 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.”
Analysts say it's important that RBS has ended the uncertainty over who would replace Hester, who was widely admired for rising to the challenge of steering the institution through the mess left behind by Goodwin, aka “Fred The Shred.”
Hester's resignation in June had been a surprise, and critics wondered whether a banker of some stature could be found to lead the institution through the difficult years to come.
He is widely believed to have been pushed out of the top job at RBS amid a tense relationship with Treasury chief George Osborne. The government has been pushing for the banks to be returned to the private sector as soon as possible — or perhaps a least before it faces re-election in 2015.
McEwan, who heads the bank's retail division, will receive an annual salary of $1.6 million and said he did not wish to be considered for an annual bonus this year or next. He also asked that any award for his work this year be deferred until 2017. Even then, taxpayers must gain value first.