Royal Bank of Scotland is reportedly poised to name insider Ross McEwan, its head of retail banking, as successor to chief executive Stephen Hester.
The state-backed lender is said to be in late-stage talks with the Bank of England’s Prudential Regulation Authority over the appointment of the New Zealander, according to the Financial Times.
Mr Hester announced his resignation from the role in June, amid speculation that he had been forced out at the behest of the Treasury, which ultimately controls an 80% stake in the bailed-out bank.
Reports today suggested an announcement on Mr McEwan’s appointment could be imminent, possibly in time for RBS’s half-year results tomorrow. A spokesman for the bank declined to comment.
Mr McEwan joined RBS as head of retail banking last year after holding a similar position at Commonwealth Bank of Australia.
His appointment is seen by some as a politically acceptable choice indicating a shift in focus away from investment banking - associated by many with high-rolling City risk takers - towards the more traditional high street retail arm.
Previous speculation had suggested Mark McCombe, a senior fund manager at BlackRock, as a leading candidate to head RBS, but he recently ruled himself out of the running, returning the focus to an internal succession.
Mr McEwan’s selection as preferred candidate was discussed at an all-day board meeting yesterday though the PRA has yet to sign off on the choice, sources told the FT.
The new appointment will have to face a series of challenges including calls for it to be split into a “good” and “bad” bank, as well as the question of when it can start to be returned to the private sector. He will also face the intense political scrutiny inevitable given the level of taxpayer investment in RBS.
The bank was thrown into turmoil when Mr Hester announced his departure recently though is forecast to have made progress when tomorrow’s results are unveiled.
Better retail revenues and lower loan losses at its troubled Ulster Bank arm are expected to have helped, with analysts pencilling in £917 million in pre-tax profits for the three months to the end of June, against losses of £168 million a year earlier.
But they warn the bank’s shrinking investment banking business will continue to see sliding revenues, down by an expected 10% on the first quarter.