SINCE taking over the top job last month, Royal Bank of Scotland chief executive Ross McEwan has been doing the rounds of his new empire, meeting and greeting colleagues in offices and branches and telling them what a good job they are doing.
I guess he forgot to tell some of them that it would probably be the last time they would meet.
McEwan is yet to get his feet properly under the table but he has made it known that the clean-up operation will go on and that it means yet more upheaval for the bank, and more job losses.
In getting the top post he seems to have agreed – or been instructed to follow – a strict regime that will mean further belt-tightening. The capital position is to be strengthened in order to make sure RBS is copper-bottomed when the time comes for it to be returned to the private sector, and its remaining toxic assets will be parcelled up into an internal “bad bank” – RBS Capital Resolution – to free up more capital for its core business.
The New Zealander, who succeeded Stephen Hester last month, says the bar for RBS has to be higher than for its rivals because it was saved by the UK government. That sounds like a line passed to him from the Treasury and will confirm in some minds that McEwan is the closest we have to a civil servant banker.
He has presented himself well, the caring kiwi with a passion for making it happen (to coin a phrase). But he is clearly being ordered to swap the flowers and chocolates for a butcher’s knife and get busy slashing the bank’s balance sheet and workforce.
The poorer than expected quarterly figures unveiled on Friday saw the share price take another tumble, distancing itself yet further from the break-even price that will enable the bank to be privatised. With a new round of restructuring yet to come, it will delay that process until after the 2015 general election, an admission that may dismay chairman Sir Philip Hampton, who was recently talking up RBS’s near-readiness for the transition.
With the foreign exchange scandal developing, a further blow on Friday was a black mark on RBS’s record of lending to small businesses. A review by former Bank of England deputy governor Sir Andrew Large revealed that only one in four applicants ended up with a loan.
McEwan may need another in-tray.
Hesitancy over Twitter flutter
TWITTER comes to market on Thursday with an expected $11 billion (£7bn) price tag, somewhat lower than the $15bn talked about earlier.
Attention will focus on whether it can achieve an early premium or whether the ghost of Facebook’s botched flotation last year will come back to haunt it.
An early scare for investors was a tumble in Facebook’s shares last week when it warned on growth expectations in both user numbers and advertising.
Few brokers are prepared to recommend Twitter shares to clients.
It has yet to make a profit and is not likely to do so for at least two years.