Royal Bank of Scotland ended uncertainty over its leadership by confirming that retail boss Ross McEwan will take on one of the “most important and challenging” roles in global banking.
He will succeed chief executive Stephen Hester on October 1 and will be paid a £1m salary, plus £350,000 in cash each year in lieu of a pension.
The 56-year-old New Zealander – reportedly paid a £3.2m “golden hello” on joining RBS last year – has asked to defer awards under his current role until 2017 and to forgo an annual bonus as chief executive for 2013 and 2014, although he will be eligible for a long-term incentive award next year.
The announcement came alongside half-year figures showing RBS swung out of the red with pre-tax profits of £1.4bn against losses of £1.7bn a year earlier, following its first two consecutive quarters of growth since 2008.
But RBS became the latest bank to set more cash aside for mis-selling of payment protection insurance (PPI), confirming another £185m to cover claims, taking its total bill for the scandal to £2.4bn.
This week has seen high street banks report another £2.7bn in PPI charges after Barclays took a further £2bn hit and Lloyds yesterday put aside £500m.
Chancellor George Osborne welcomed Mr McEwan’s appointment and said he was impressed with his “vision of RBS as a strong, UK-centred corporate bank that is focused on supporting the British economy”.
He said: “He’ll provide the leadership RBS needs as the bank puts the mistakes of the past behind it, and the Government seeks to get the best value for the taxpayer.”
RBS chairman Sir Philip Hampton said Mr McEwan was taking on a job that was “among the most important and challenging in the business world”.
He said: “With his extensive experience in banking and the leadership that he has shown in his time at RBS, Ross will be a great chief executive for the group. Ross has already become a champion for customers in our business and will continue that role as chief executive.”
Sir Philip stressed that Mr McEwan was the only candidate offered the job.
He will take the helm just over a year after joining RBS as chief executive of UK retail last September, taking charge at a crucial time amid pressure from Mr Osborne to concentrate on lending more to households and businesses.
Mr McEwan said: “It’s really important for the UK economy to have this bank up and running and doing what banks should be doing – looking after customers, providing finance to individuals and small and medium-sized businesses that are the heartbeat of any economy.”
“It’s a major responsibility for me to guide this organisation to focus very strongly back on our customers,” he added.
Shares in the 80% state-owned bank fell 4%, giving back most of yesterday’s 5% gain, despite City backing for Mr McEwan’s appointment.