Mcewan flexes muscle as bank grows in strength

IT has been interesting to observe the increasing willingness of Ross Mcewan to comment on matters beyond the fortunes of Royal Bank of Scotland.

In recent weeks we have seen Mr Mcewan put his head above the parapet to warn a no-deal Brexit could push the UK economy into recession. Now we know the bank is worried about the Brexit process, with the uncertainty around the end-game forcing it to make a £100 million charge in its accounts.

From a UK economy perspective, it is surely a worry that one of the country’s biggest providers of business and personal finance has factored into its accounts an expectation of greater risk to the downside from Brexit. It certainly concerned investors, who sent the bank’s share price tumbling more than four per cent yesterday.

Beyond the economics, the bank’s Brexit positioning was interesting politically too. Political comment from the bank has been scarce since it was bailed out by the UK Government a decade ago. And this is understandable, of course: it would be a very odd state of affairs for a management team to take its majority shareholder to task. But there are signs the tide is beginning to turn. With Royal profitable, paying dividends, and the Government reducing its stake, could we be about to see Mr Mcewan stepping into public debate even more?

Ultimately, his objective is to deliver as maximise value for shareholders. But with Brexit looking increasingly like an obstacle to making that happen, it could put him on a collision course with the organisation that saved the bank from extinction.