LONDON - Royal Bank of Scotland on Friday named the head of its retail operation, Ross McEwan, as its new chief executive.
Mr. McEwan, 56, will replace Stephen Hester at the helm of the government-controlled bank at the beginning of October.
After five years focused on shrinking the bank and shoring up the retail business following a government bailout in 2008, R.B.S. is now moving into a new phase with Mr. McEwan tasked with creating a strategy that will allow the government to sell its 81 percent stake.
“This is a job that is among the most important and challenging in the business world, and Ross has shown that he has the drive and capability to take it on,†the British bank’s chairman, Philip Hampton, said in a statement. “Ross was the strongest candidate†of an international search for a new chief executive, Mr. Hampton added.
Mr. McEwan will receive an annual salary of £1 million, or $1.5 million. He does not want to be considered for a bonus in 2014, the bank said in the statement. The announcement follows widespread public anger regarding previous bonuses for the outgoing chief executive, Mr. Hester, who was eventually forced to waive the multi-million dollar compensation packages.
R.B.S. also said on Friday that it posted a profit in the three months that ended June 30 compared to a loss in the same period a year earlier, as provisions for bad debts fell. Profit in the second quarter of this year was £220 million, or $332 million, after the bank had a loss of £429 million in the second quarter in 2012. R.B.S. reported its first quarterly profit since 2011 at the beginning of this year.
Shares in the British bank fell almost 4 percent in morning trading in London on Friday.
Under the outgoing chief executive officer, Mr. Hester, R.B.S. has been slashing assets, reducing costs and trimming exposure to riskier trading activity over the past four years. After an expansion spree abroad that went sour as the financial crisis hit, R.B.S. scaled back its international activities to focus on domestic retail operations.
R.B.S. has been looking to replace Mr. Hester, who said in June that he would step down at the end of the year. The bank’s board decided that it wanted to bring in a new chief executive to help the government sell its stake in R.B.S. to minimize any uncertainty about how long its leader would stay in the job.
R.B.S. is preparing for the government to start selling its stake anytime soon, even though the government hinted it delay such a move because the bank’s shares are still trading below the level at which the government took its stake in 2008.
The Chancellor of the exchequer, George Osborne, also has ordered a review into whether R.B.S. should be split into a so-called good bank and bad bank to separate toxic assets from other profitable businesses.
Mr. McEwan became the head of R.B.S.’s retail operation in August 2012, after five years in the same role at Commonwealth Bank of Australia. While at Commonwealth Bank, Mr. McEwan was credited with increasing profits from retail banking by 50 percent over five years, R.B.S. said in a statement.
