RBS Royal Bank of Scotland Group PLC

--RBS CEO Ross McEwan has resigned in a surprise exit after five and a half years heading the state-owned bank

--Mr. McEwan oversaw a huge restructuring and RBS's return to profit and dividend payments following its 2008 bailout

--Mr. McEwan will remain in place until a successor is found, with internal candidate Alison Rose the clear favorite to become RBS's first female CEO

 
   By Adam Clark and Adria Calatayud 
 

Royal Bank of Scotland Group PLC (RBS.LN) Chief Executive Ross McEwan has resigned after five and a half years, marking a new phase in a huge restructuring effort that returned the lender to profitability a decade after the financial crisis.

The timing of Mr. McEwan's exit was unexpected with RBS still in the process of being returned to private ownership. The U.K. government holds a 62% stake in the bank following its 2008 bailout and has said it intends to sell its stake down over the next five years.

"With much of the restructuring done and the bank on a strong and profitable footing, I have delivered the strategy that I set out in 2013 and now feels like the right time for me to step aside and for a new CEO to lead the bank," Mr. McEwan said.

RBS made a net profit of 1.62 billion pounds ($2.09 billion) last year after returning to profitability in 2017. Mr. McEwan has also overseen a return to dividend payments and shareholders recently approved a plan for share buybacks to speed up its return to private hands.

Mr. McEwan has a 12-month notice period and will remain in his position until a successor has been found. RBS said a search for a successor will start immediately and the effective date for Mr. McEwan's departure will be confirmed in due course.

Alison Rose, RBS's head of commercial-and-private banking, is widely seen as the favorite to become the next CEO. Ms. Rose was recently appointed as deputy CEO of the unit which houses RBS's retail-banking operations and is one of the U.K.'s most prominent senior female executives.

"Of course the bank will now have to run a process, considering external as well as internal candidates but we would bet on Rose securing the position," analysts at stock brokerage Goodbody said in a research note.

While analysts have tipped RBS as the best positioned of the U.K.'s domestic banks on the prospect of increasing shareholder returns, its share price remains mired at around half what the government paid to bail the bank out in 2008.

The next CEO will have the task of convincing investors that RBS is ready to deal with the U.K.'s planned exit from the European Union and fend off calls from the opposition Labour party for a halt to privatization and the potential breakup of the bank.

Mr. McEwan's "successful execution of the strategy to refocus the bank back on its core markets here in the U.K. and Ireland has helped to deliver one of the biggest U.K. corporate turnarounds in history. RBS is now well positioned to succeed in the future in what is a rapidly evolving landscape for the banking sector," RBS Chairman Howard Davies said.

Write to Adam Clark at adam.clark@dowjones.com and Adria Calatayud at adria.calatayudvaello@dowjones.com

(END) Dow Jones Newswires

April 25, 2019 04:45 ET (08:45 GMT)

Royal Bank of Scotland (NYSE:RBS)
Historical Stock Chart
From Mar 2024 to Apr 2024

Royal Bank of Scotland (NYSE:RBS)
Historical Stock Chart
From Apr 2023 to Apr 2024