LONDON - Royal Bank of Scotland is preparing to promote Ross McEwan to chief executive, a person with direct knowledge of the decision said Thursday.
R.B.S., which is majority-owned by the British government after a bailout in 2008, still needs the approval of the Bank of England’s Prudential Regulation Authority and the government to go ahead with the appointment, said the person who declined to be named because the decision is not final. The approval might come as early as Thursday, the person said. R.B.S. declined to comment on the plan.
Mr. McEwan, currently the head of R.B.S.’s retail bank, would replace Stephen Hester, who said in June he would leave the post at the end of this year after five years in job.
Mr. Hester’s announcement took some investors by surprise, and came as the government is preparing to start selling its stake in the bank. The bank’s board had decided it needed a new chief executive to oversee the pending share sale without questions being raised about how long he would stay in the job.
The new chief executive will be expected to work closely with the government to complete the privatization process, which could take several years to complete. R.B.S.’s shares still trade below the level that the government accumulated its 81 percent stake.
The new head would also have to create a new strategy for a bank that is completing a major restructuring, including shedding hundreds of billions of dollars of assets and radically shrinking its investment banking operations. The new chief’s pay package will also be subject to intense public scrutiny. Mr. Hester was forced to turn down several bonuses after public outcry over the multimillion-dollar payouts.
Some analysts have raised questions about whether enough candidates also from outside the bank were considered for the position given that the board only decided a few weeks ago to replace Mr. Hester.
Should Mr. McEwan’s appointment be confirmed, R.B.S. would join local rival Barclays in picking its own retail banking chief to run the company. Barclays named Antony P. Jenkins last year as chief executive to help repair the bank’s reputation among investors following a string of financial scandals.
Mr. McEwan became head of R.B.S.’s retail operation in August 2012 when he joined from Commonwealth Bank of Australia, where he had held the same title for five years. Before that he was in charge of the bank’s branch network and contact centers.
