RBS chief warns bank staff over Brexit ‘unknowns’

Ross McEwan said the EU vote has raised a 'range of unknowns'. Picture: Andrew Milligan/PA Wire
Ross McEwan said the EU vote has raised a 'range of unknowns'. Picture: Andrew Milligan/PA Wire
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Royal Bank of Scotland chief executive Ross McEwan has warned the group’s staff that the vote to leave the EU has created “short, medium and long-term” economic uncertainties.

McEwan also moved to reassure workers that the state-backed lender, which employs about 63,000 people in the UK, was well placed to deal with the fallout.

Lloyds boss Antonio Horta-Osorio has also written to staff, urging them to work with 'positive energy and passion'. Picture: Justin Tallis/AFP/Getty Images

Lloyds boss Antonio Horta-Osorio has also written to staff, urging them to work with 'positive energy and passion'. Picture: Justin Tallis/AFP/Getty Images

In a memo to staff, he said: “We had planned extensively for both possible outcomes to ensure we were well placed to support our customers and colleagues.

“The result of the vote carries with it a range of unknowns about the short, medium and long-term prospects for the UK and its economy. Added to this, we now have a period of political uncertainty.”

READ MORE: Market recovery continues after Brexit battering

New Zealand-born McEwan also gave a nod to the bank’s international workforce, amid fears that Britain could lose access to the single market.

As someone born outside the UK, I see one of this country’s biggest strengths as its openness to the rest of the world

Ross McEwan

READ MORE: RBS losses more than double to £968m in first quarter

He said: “As someone born outside the UK, I see one of this country’s biggest strengths as its openness to the rest of the world, and the people of it. As a major employer and backer of the economy, we have a duty to ensure that we reflect that.

“The diversity of those who make up this bank at every level is key to our success. In uncertain times I want to ensure that everyone understands that.”

Meanwhile, McEwan’s counterpart at Lloyds Banking Group also issued a memo in the wake of the referendum, insisting the lender was well placed to weather “turbulence” in the sector and urging its 75,000 staff to work with “positive energy and passion”.

In his note to workers, Antonio Horta-Osorio said: “Here at Lloyds Banking Group, we did what we do best on Friday. We were there to support our customers and clients and each other, and whatever the future holds, that is what we will continue to do. Our purpose is to help Britain prosper, and in particular being there for our customers in times of change and uncertainty is what they look for from us.

“We had robust plans in place for either outcome, and I have been immensely proud of everyone who ensured that they were delivered smoothly on the news of the announcement, and since. I know that the referendum result has had an impact on the share price of many companies, including ours, but I believe the fundamentals of the group are strong and that is a testament to the hard work all of us have done over the last few years.

“Our strategy remains unchanged. We are a UK-focused, low-risk retail and commercial bank. The delivery of this strategy in recent years has placed us in a position of strength to weather turbulence in our sector and the wider market, both now and in the future. I have often said that the attitude and ability of our colleagues is our biggest competitive advantage, and those attributes will be essential to our continued success.”

He added: “Our brands have been around for more than three centuries, and have served millions of families and businesses throughout challenging times. I am confident that, together, we can continue to serve them with positive energy and passion in the coming weeks and months.”

Meanwhile, it emerged that Britain’s lenders have tapped the Bank of England for another £3.1 billion in extra cash to help bolster their balance sheets following the Brexit vote.

Lenders have now taken more than £9bn from the Bank so far this month after it launched three additional so-called funding auctions surrounding the referendum vote.

It is the first time the Bank has ever held more than one such auction in a month.

Bank governor Mark Carney pledged on Friday to pump at least £250bn into money markets if needed to prevent a credit squeeze.

But the result of the latest funding auction shows little sign of stress in the banking sector and is less than the £3.3bn taken by lenders at the start of the month.

Banks in the UK already have a combined £600bn in liquidity on their balance sheets, helping shield the sector from a repeat of the credit crunch seen at the height of the financial crisis.

In full: Ross McEwan’s memo to RBS staff

As you know, last week the UK voted to leave the European Union. Whilst this result was a surprise for many, we had planned extensively for both possible outcomes to ensure we were well placed to support our customers and colleagues.

Our day 1 plan worked, but of course the result of the vote carries with it a range of unknowns about the short, medium and long-term prospects for the UK and its economy. Added to this we now have a period of political uncertainty.

Both of these factors combined have led to significant falls in the value of the pound, the value of many British companies and of course, the value of UK and European banking stocks – ours included.

The reason for these falls and wider volatility is essentially the inability of the market to find certainty in what shape and state the UK economy and its companies will be in leading up to and when eventually leaving the EU.

Despite the noisy fallout from the vote, many of the fundamentals remain true. Our view as a bank is that the UK remains a large, well developed economy with good long-term prospects. It’s our home market and our job as a leading bank here is to help it succeed.

Last week before the vote, we had 16 million customers that needed serving well. Today we have the same number and our job remains the same – to look after their needs better than anyone else.

I also know that the consequences of the vote ripple beyond the markets and into everyday exchanges between colleagues, friends and family.

As someone born outside the UK, I see one of this country’s biggest strengths as its openness to the rest of the world, and the people of it. As a major employer and backer of the economy we have a duty to ensure that we reflect that. The diversity of those who make up this bank at every level is key to our success. In uncertain times I want to ensure that everyone understands that.

The strengths and determination of the people in this bank was on full display last week as the vote became clear. Our colleagues on the CIB trading floors, across the frontline and in finance, communications and supporting roles across the bank did us all proud and we were the first UK bank out there reassuring our customers.

Let’s stay focused on what matters – serving our customers well.

Thank you as always for your continued efforts.