ROYAL Bank of Scotland announced the abrupt departure of the head of the group’s investment bank yesterday only a month after putting him in charge of the operation.
Taxpayer-backed RBS said Rory Cullinan, executive chairman of its corporate and institutional arm (CIB), will remain with the bank until 30 April to ensure a smooth transition.
Cullinan, who was previously in charge of the group’s so-called “bad bank” and praised for running down its unwanted loans quicker than expected, was promoted to the top investment banking job on 26 February.
One source said that his departure followed a disagreement with the RBS board over the implementation of the continuing retrenchment strategy at the investment bank operation.
The Scots bank, which is 79 per cent owned by the state after its bailout in the financial crash, confirmed at its annual results for 2014 in February that it was to sharply shrink the investment bank.
RBS chief executive Ross McEwan said at the time that the group planned to exit 25 countries across Europe, Asia and the Middle East in order to concentrate on lending to UK households and businesses.
A very significant contribution to the rebuild of RBSRoss McEwan
This policy has been favoured by the coalition government, and particularly Chancellor George Osborne, since it inherited the holding in the bank in 2010.
The latest retrenchment will result in thousands of investment banking jobs being shed and about 60 per cent of the division’s assets.
McEwan said earlier this year: “Let me be quite clear, this marks the end of the standalone global investment bank model for RBS.”
Cullinan was appointed boss of CIB on the day those plans were announced, so he agreed on the strategy, the source said, adding that the disagreement was over “how to get there”.
Separately, there was personal embarrassment for the CIB executive chairman recently when a tabloid paper alleged that he had sent messages to his daughter over the Snapchat social networking site saying such things as he was in a “boring meeting”.
He was one of the best paid executives at RBS. Earlier this month he was awarded shares worth more than £2 million, due to be vested between 2016 and 2020.
The bank confirmed yesterday that he would receive a severance payment, but would not divulge details. Cullinan’s basic salary in 2014 was £800,000.
McEwan praised Cullinan’s “very significant contribution to the rebuild of RBS over the past six years”, including the rundown of the non-core division and the recent follow-on sale of shares in the American Citizens subsidiary after its flotation last autumn.
Cullinan said he was “pleased and proud to have played a significant part in restoring RBS to a safe and sound position”, and wished his colleagues future success.
The bank said yesterday that Chris Marks, chief executive of CIB, and Mark Bailie, chief executive of the bank’s Capital Resolution arm, will now join the bank executive committee as co-chiefs of CIB.
On the stock market RBS’s shares closed up 4p at 347.10p.