Banks hoping for brighter backdrop as 2020 beckons

● Transformed RBS still facing further challenges ● TSB will look to put a difficult 12 months behind it

More than a decade on from the financial crisis, British banks hope to put the shock firmly behind them as they go into the third decade of the millennium.

Despite competition from the challengers, regulation, pensions and a mortgage price war, the banks will be relieved to have escaped PPI, weathered another Bank of England stress test and launched their own rivals to the nifty new apps that have started capturing customers.

The government, perhaps preoccupied with Brexit, elections and other challenges, did not reduce its stake in Royal Bank of Scotland as it had in 2018.

By putting new chief executive Alison Rose in charge, the bank hopes it has turned a corner.

Ross Mcewan was the boss who helped reform the bank after its bailout during the financial crisis.

The lender has shrunk significantly since the New Zealander took charge in 2013, reducing assets from more than £1 trillion to £730 billion, headcount from 109,000 to some 66,600, and withdrawing from many countries.

Analysts and insiders will hope that his replacement can now focus on running a fairly normal high street lender. Although there is still work to be done to correct the problems created in RBS’ heyday, when it was briefly the world’s biggest bank.

“Is it back to being an allsinging, all-dancing bank? I think probably not,” said Nicholas Hyett, an analyst at Hargreaves Lansdown.

“They probably have some questions to answer about what the future of Natwest Markets is within the group. It doesn’t quite gel with what they’re doing elsewhere.”

The bank also spent some of the year reacting to challengers nipping at its heels. In November, RBS launched Bo, a new app-based current account, which it hopes will help it knock back some of the stiff competition from the likes of Monzo, Revolut and Starling.

Metro Bank ended the year as it started, in crisis, as longterm chief executive Craig Donaldson announced his intention to step down. It was the final major piece of bad news after a calamitous year for the high street challenger.

Another high street bank, TSB, faced its own problems over the year as it tried to stabilise after a major IT failure in 2018.

In November the bank was embarrassed as some account holders did not get their salaries paid into their accounts due to another IT glitch. It was made considerably worse coming, as it did, just days after law firm Slaughter and May found that the TSB board had lacked common sense in the run-up to the 2018 outage.

Then, just days later, staff were told that 82 branches of the bank would be closing, with up to 400 jobs lost.