Rose sparks shake-up at RBS with NatWest Markets purge
ALISON Rose moved to put her stamp on Royal Bank of Scotland, kick-starting a radical shake-up of the troubled NatWest Markets arm.
The investment banking part of RBS has been embattled for some time and has had a particularly rocky year. Today RBS revealed NatWest Markets chief executive Chris Marks and chief financial officer Richard Place have “stepped down”, with a search under way for successors.
City analysts think RBS should shrink NatWest Markets; some say it should be closed altogether. Today’s move suggests Rose believes it should be retained, but job cuts beyond the executive team seem likely. RBS treasurer Robert Begbie, a hugely respected figure among analysts and investors, has been appointed interim NatWest Markets boss.
Begbie is an RBS and City veteran of 40 years.
Rose was appointed CEO in November, the first woman to run a major UK bank. She has already told staff that “tough choices” await as she shakes up a bank still 62% owned by Government. Rose will unveil a full strategy update with results in February. NatWest Markets employs 5000, mostly in the City.
It offers debt management, currency trades and other services for RBS’s large corporate clients, but is expected to make a loss for the year. Rose said: “NatWest Markets plays a crucial role with RBS, allowing us to provide our customers with the products and services they need to succeed.”
She said the departing executives had “set the foundations for the continuing transformation and simplification” of the bank. One analyst said: “The market is looking for radical change to at least reduce the scale of the drag on group returns. NWM can never be entirely ‘fixed’ so the objective is to make it ‘less bad’. Another round of painful and expensive restructuring beckons.”
Analysts note that 20% of RBS’s group capital is tied up in NatWest Markets, generating zero returns. Poor trading in the third quarter at NatWest Markets was deemed partly responsible for tipping RBS into a loss. In 2018, NWM made a loss of £290 million on revenues of £1 billion. RBS shares were today steady at 249p.
That is far below the 500p at which the bank was bailed out during the financial crisis. Its assets have more than halved since the rein of Fred Goodwin, the chief executive who oversaw RBS’s extraordinary growth and spectacular collapse.
