Cullinan given key task heading RBS ‘bad bank’

Rory Cullinan handled disposal of �22bn of non-core assets. Picture: Jane Barlow
Rory Cullinan handled disposal of �22bn of non-core assets. Picture: Jane Barlow
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ROYAL Bank of Scotland has appointed Rory Cullinan to run its newly-created “bad bank” and oversee the flotation of two divisions.

Cullinan, currently chief executive of the bank’s assets business, will lead RBS capital resolution (RCR) which was set up last month as part of a carve up of the organisation.

The new division will be responsible for the accelerated rundown of an outstanding £38 billion of toxic assets, including some its worst performing loans.

Of that total, the remaining non-core assets make up £23.5bn while the most high risk loans from the core bank account for £14.8bn. In addition to the total assets, there is another £11bn of capital.

The £14.8bn is split between four of the bank’s divisions – UK corporate will contribute £5.5bn of loans, Ulster Bank £4.1bn, markets £2.6bn and international banking £2.6bn.

Cullinan will also manage the bank’s shipping business and the flotations of Williams & Glyn’s (W&G), the new bank formed from the disposal of 315 branches, and Citizens in the US.

W&G – which was sold under the codename Project Rainbow – is scheduled for a listing in 2015 or 2016 while Citizens could come to market next year under Bruce Van Saun, the former group finance director, who took over as chief executive.

The day-to-day management of Citizens and W&G will remain in place and RBS expects to make further announcements on the structure of the capital resolution business.

Ross McEwan, RBS chief executive, said: “I’m delighted that we have retained Rory to lead such a key part of the bank’s strategy.

“This new division will help us take the necessary actions on capital and risk to ensure nothing distracts us from making RBS a great customer bank.”

Cullinan took the bank into the government’s asset protection scheme and over the past five years has handled the disposal of £221bn of non-core assets. He will report to McEwan and join the group executive committee from 1 January.