LONDON, Feb 14 — Royal Bank of Scotland, a lender synonymous with the financial crisis, is to be renamed, new chief executive Alison Rose said today as she also placed climate top of her agenda.
The first female CEO of a major UK lender, Rose added that she planned to halve the size of the small RBS investment banking arm.
The announcements were revealed in an earnings statement showing that the Edinburgh-based bank’s net profit almost doubled to £3.1 billion (RM16.5 billion) in 2019 from a year earlier.
But its share price slid 5.6 per cent to 216 pence in London morning deals, with investors disappointed with the bank’s outlook for 2020 that pointed to “ongoing market uncertainty”.
Royal Bank of Scotland Group, which runs RBS, NatWest and Ulster Bank branches, will meanwhile be renamed NatWest Group later this year.
It is the first name change since the bank was founded in 1727, although RBS branches will continue to exist.
“The essential reason for this (name change) is as the bank has evolved from the financial crisis and the bailout, we have focused on the NatWest brand,” said RBS chairman Howard Davies.
“We have exited a lot of the international businesses which were not profitable. That was branded RBS and that’s gone.
“It really makes no sense for us to continue to be called RBS. It was designed for a global group of brands, which we no longer are,” Davies added.
Rose had meanwhile been deputy-head of the group’s NatWest Holdings retail business and the RBS commercial and private banking division, before her promotion at the end of 2019.
She has replaced Ross McEwan, who steered RBS through a steady recovery after its rescue at the height of the financial crisis more than a decade ago with £45.5 billion of UK taxpayers’ cash in what was the world’s biggest banking bailout.
Despite a turnaround, the British government still owns more than 60 per cent of the bank.
“The task for Alison Rose is now to create a new legacy-free bank in her image,” Neil Wilson, chief market analyst at Markets.com, said today.
“The renaming of RBS to NatWest is more than a name change — the bank is seeking to move on and put the past misconduct-ridden days behind it.
“A PR stunt it may be, but it shows us the direction that new boss Alison Rose is seeking to steer,” Wilson added.
On reducing the size of the investment banking arm, NatWest Markets, Rose gave no indication of the number of job losses.
Rose today meanwhile said that “climate, and the role we can play in accelerating the transition to a low carbon economy” was among her “initial areas of focus where we can make a substantial impact”.
She expressed “an ambition to take the lead in combating the causes of climate change”.
Rose added: “Today, we are setting a bold new ambition — to be a leading bank in the UK & Republic of Ireland helping to address the climate challenge; by making our own operations net carbon zero in 2020.”
She said the bank would seek “to at least halve the climate impact of our financing activity by 2030, and intend to do what is necessary to achieve alignment with the 2015 Paris Agreement”.
The UK financial sector is facing increasing pressure at least to limit the loans it makes to companies whose day-to-day operations are seen as harmful to the environment.
The 2015 Paris agreement saw nations commit to limiting global warming to two degrees Celsius (2.7 Fahrenheit) above pre-industrial levels as a way of curbing the worst impacts of global warming.
A safer cap of 1.5 Celsius was included as a goal for nations to work towards. — AFP