RBS confirms new CEO as bank swings to profit in second quarter

2nd Aug 2013 07:10

Royal Bank of Scotland (RBS) has confirmed reports that Ross McEwan will take over as Chief Executive Officer (CEO) from Stephen Hester as the lender unveiled its first half results.McEwan, who joined the 81%-taxpayer-owned bank last year as head of the retail investment arm, had been widely expected to take the top role.The New Zealander, who began his career in insurance before joining Commonwealth Bank of Australia, will have his work cut out for him as the bank prepares to return to privatisation. In the first half, the bank swung to a pre-tax profit of £1.3bn from a loss of £1.6bn last year following a restructuring."The results of our successful restructuring continue to show benefits - capital strength and liquidity up, balance sheet, Non-Core assets and Non-Core/Irish losses all down, again," said Hester, who announced his shocking departure in June. RBS improved its capital with the Core Tier 1 ratio up to 11.1% on a fully Basel II basis. Funded assets fell to £843bn, down £86bn from last year, with non-core assets down £27bn to £45bn.Group operating profit came to £1.6bn, up 5.0% from the previous year. Credit quality continued to improve, with first half impairments down 15% from the prior year in core and 24% in non-core. The company is currently undergoing a review by Rothschild to assess the government's proposal to split the lender into a "good bank" and "bad bank" to provide better ease towards privatisation. The government's objectives are to get the best value for money for the taxpayer.RBS said it was working closely with the Treasury and its appointed advisors to provide conclusions by the autumn.Looking ahead, the bank expects to achieve a fully loaded Basel III Core Tier 1 ratio of over 9.0% by the end of 2013.The bank is strongly positioned with capital and funding capacity in place to support lending growth as customer demand increases on improved consumer confidence in retail and corporate franchises, the group added."The business challenges ahead lie principally in improving future operating trends and sustaining the focus and consistency needed to make further progress," Hester said. "RBS can be a 'really good bank' for customers and shareholders.That is our goal."RD