Royal Bank has a duty to public service? Cobblers
No one knows Royal Bank of Scotland better than me when it comes to culture change and its leadership. So I am happy to weigh in on the negativity plastered over many news‑ papers over the past few weeks on this state‑backed bank.
But, firstly, let us all be clear, part‑pub‑ licly owned does not mean public service oriented. This is the big mistake many commentators and potentially the SNP are making. Yes, we all know that RBS was bailed out. Yes, it was up to its back end in sub‑prime in the USA. Yes, it grew its Global Restructuring Group, which was to all intents and purposes, a pretty awful beast. But, the new team leading this bank are exactly that – a new team. Is it not time to give them a break?
I read some leader columns last week‑ end that ostensibly want this bank to be hauled over the coals again and again and again. Never forgiven and never forgotten for what it did. Despite all the good work behind the scenes by RBS chief execu‑ tive Ross Mcewan and his team, he and you will never be given the opportunity to forget past indiscretions. It is death by a thousand cuts. Unfortunately for Ross, there is no confessional box where he can confess all the bank’s sins, pay some alms money and say some prayers for his penance. That is not the world we live in, but if we cannot forgive this bank, then it will only cause pain in the long run.
Having spent years inside the heart of Royal Bank of Scotland, I’m not saying everything is perfect. Indeed, far from it. There were some people I just did not care for and some things I was a little uncom‑ fortable with. But, hey‑ho, is that not just life and business? I do know that Mcewan is to be applauded for sticking with it for so long. He will have painful decisions to make. Why? Well, he has to make a profit in a period of unprecedented technologi‑ cal and societal change.
Let’s get this branch closures saga out the way. It’s a bit like Brexit. The older genera‑ tion across the UK voted for Brexit, but it’s the younger generation that it will affect most. The older generation still like to deal in cheques and perhaps visit a branch to stick them in. As an aside, I wish compa‑ nies would stop sending me cheques. Only last week, British Gas and Scottish Power sent me cheques. Why can’t they just pay me the cash they owe me straight into my bank account? After all, they have no prob‑ lems taking it out electronically. So, the older generation like the idea of a branch that is half empty all the time that is not commercially viable to operate.
Then we have the younger generation ‑ the millennials, if you wish – who didn’t vote for Brexit, but who will be impacted most. They do everything via their mobile phones. They don’t visit bank branches. So, Mcewan has a diminishing and dying older generation who want branches, coupled with a massive growing generation of customers who do not want them. If you were running this business, you can see where you would put your energies – online digital and mobile right?
But, alas, we still think that because the Royal Bank is publicly owned it has a duty to public service. Cobblers. It has a duty to the British taxpayer to get as much of its cash back to them as it can. It does this by making unpopular choices that ensure that it is whol‑ ly competitive in the next decade. That means the older generations won’t like it much and write to the SNP, who are now making some noise, but not too much, as they are a practical party. Royal Bank of Scotland, as said earlier, deserves a break. Remember, it is a bank not a community service there to tackle loneliness or help fix other societal problems. It needs to make a profit, gain institutional investment and confidence, while adapting to keep ahead of the curve in the technology of finance.
Goodwin and Hester (former RBS chief executives) are gone and Mcewan needs to be allowed to finish what he started. So, let’s let him do that, eh? Jim Duffy, Create Special
I do know that Mcewan is to be applauded for sticking with it for so long