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New RBS chief Ross McEwan pledges to increase bailed-out bank's lending New RBS chief Ross McEwan pledges to increase bailed-out bank's lending
(about 2 hours later)
Ross McEwan began his first day as chief executive of Royal Bank of Scotland with a pledge to increase the bailed out bank's lending to businesses and households. Ross McEwan began his first day as chief executive of Royal Bank of Scotland with a pledge to increase the bailed out bank's lending and the admission he felt a "high level of trepidation".
Replacing Stephen Hester, who left on Monday after nearly five years at the helm of the 81%-taxpayer owned bank, McEwan said: "I want RBS to stand firmly behind its customers with the explicit goal of helping them succeed. That includes an increase in our lending. We must do everything possible to support the recovery and future growth of the UK." His contract, made publicly available on the day he officially replaced Stephen Hester, shows the bank had started paying him as if he was in charge from 1 August.
In a memo to staff to mark his first day in charge after promotion from running the retail bank, McEwan also said he would simplify the bank and make it easier to do business with customers. It also confirmed McEwan, who was recruited a year ago to run the retail bank, can earn just under £1.4m a year as chief executive – £1m in salary, £26,250 in benefits and £250,000 in pension contributions – before being awarded any shares under a long-term incentive plan.
"I've been here for a year now, and it's clear to me that we have a greater obligation than any other bank to build a business that supports its customers. We were saved by the government five years ago because of how important we are to the everyday economy of the UK," he said. When he was appointed to the role in August, McEwan said he would not take an annual bonus for the rest of 2013 and the whole of 2014.
Hired by Hester a year ago to run the retail bank, McEwan made no reference to the ongoing review commissioned from Rothschild by the Treasury into whether RBS should be broken up into a good and bad bank. But he indicated that the bank would keep an international presence while retaining a UK focus. His pay in his previous role running the retail bank was not disclosed although he was handed £3m in shares to buy him out of his deals at the Commonwealth Bank of Australia from where Hester hired him.
"A strong bank needs a strong home market, and the UK is ours. We are an international bank because our customers trade globally, but the UK is where the majority of our customers run businesses, create homes, build financial security for their families and put their ambition to work in multinational companies," he said. McEwan paid tribute to his predecessor in an address to staff as he admitted to "high levels of trepidation". Hester had a very big smile on his face on his last day on Monday, McEwan said, as he told employees "we need to repay the taxpayers for their faith in this organisation".
McEwan, a New Zealander, is being paid £1m a year in salary and is not taking an annual bonus for next year after the furore surrounding his predecessor's pay but will get awards of shares under a long-term incentive plan based on three years' performance. When he was recruited to run the retail bank, RBS gave him £3m in shares to buy him out of his deals at the Commonwealth Bank of Australia.
/> 		Taxpayers own 81% of the bank, and shares were trading at 363p as McEwan took charge – well below the 500p average price at which the government amassed its stake in the bank in 2008 and 2009.
He started his first day in charge with a presentation to staff and then a visit to NatWest customers who run publishers and event organisers Listora, based in Shoreditch, London. McEwan told staff in a memo: "I want RBS to stand firmly behind its customers with the explicit goal of helping them succeed. That includes an increase in our lending. We must do everything possible to support the recovery and future growth of the UK."
McEwan has already said RBS will back the second phase of the government's Help to Buy programme designed to make it easier for customers will deposits of 5% of the value of a home to obtain a mortgage. McEwan began his new role on the same day as the new finance director, Nathan Bostock, also promoted internally, whose contract shows he will earn £1m a year before bonuses – £765,000 in salary, £26,250 of benefits and £267,000 for his pension.
Bostock, hired in 2009, has the bank's office at 280 Bishopsgate in London listed as his normal place of work – even though the bank's headquarters are technically in Edinburgh. His predecessor Bruce van Saun, who has moved to run the bank's US arm Citizens, in adition had the Edinburgh office listed.
McEwan has both locations in his contract although all of the new board directors have clauses in their contract requiring them to travel as necessary.
London was cited as Bostock's normal place of work in his previous contract and this was not changed following his promotion to the board. McEwan made no reference to the ongoing review commissioned from Rothschild by the Treasury into whether RBS should be broken up into a good and bad bank. But he indicated that the bank would keep an international presence while retaining a UK focus.
"My aim is to make RBS one of the easiest banks to do business with," he said."My aim is to make RBS one of the easiest banks to do business with," he said.
RBS shares were trading at 363p as he took charge – well below the 500p average price at which the government amassed its 81% stake in the bank in 2008 and 2009.
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