RBS saviour Mcewan answers call at troubled Australian bank
RBS’S top boss Ross Mcewan is clearly a stickler for a challenge. Having completed one of the biggest UK corporate turnarounds in history, he’ll now have his hands full trying to fix Australia’s scandal-hit finance sector.
It is little surprise that National Australia Bank (NAB), whose chief executive quit earlier this year following a damning report into the country’s banking practices, came knocking when Mr Mcewan resigned from the taxpayer-backed lender in April.
The New Zealander took on the top job, often described as the worst role in UK banking, five years after its £45bn rescue at the height of the financial crisis. Four years later he led RBS to its first profit after almost a decade of losses.
John Cronin, a UK banks analyst at Goodbody, said Mr Mcewan’s “deep restructuring experience and his proven ability to navigate choppy waters from a political standpoint” makes him an obvious pick to lead NAB into a new era.
As NAB’S chairman-elect Philip Chronican puts it, RBS has been through many of the same challenges that his bank now faces.
But it was Australia’s lack of major problems that first drew RBS to Mr Mcewan in the first place. At a dinner with members of RBS’S board and a handful of institutional investors in 2013, shareholders urged the bank not to hire a “dull, run of the mill” banker as its next boss. Mr Mcewan, who held senior roles at Commonwealth Bank of Australia, was an early favourite.
“It was important after the financial crisis to have senior bankers who were untainted by the crisis. Australian banks had not at that time had any material problems,” said one executive who was involved in the process at the time. “A generation of top European bankers were replaced by relative outsiders.”
Mr Mcewan’s strategy at RBS has involved shrinking its sprawling international operations, resulting in thousands of job losses, and focusing on its core business in the UK and Ireland. Last year it posted a £1.6bn profit and resumed paying dividends to investors. However the bank, which is still majority owned by the Government, has also faced huge problems during his tenure.
It has battled against the high-profile scandal at its now-defunct Global Restructuring Group arm, which was accused of “widespread” mistreatment of struggling firms. It made a series of unpopular decisions to shut hundreds of high street branches. Plans to spin off Williams & Glyn as a separate challenger bank fell through. And shares have fallen.
There will be plenty more headaches for him to deal with at NAB. Australia’s banking sector is fighting to clean up its reputation after a public inquiry into the country’s lenders uncovered widespread misconduct and concluded that bankers in Australia were motivated by “greed”.
NAB was singled out in the report, leaving the bank’s former boss to admit it had been a “shameful year” after the inquiry revealed it had charged pensioners for advice they never received.
While sources said in April that Mr Mcewan had ambitions to leave the UK and return to “sunnier climes” (he has a farm in New Zealand), few expected him to retire for a life of ease. As suspected, he has accepted the challenge.