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"As an advocate of the business, one shouldn’t be surprised if it is suggested that one should take responsibility for it"
Brian Stevenson, RBS |
TRANSACTION BANKING WAS one of the jewels in the crown of ABN Amro. It combined world-class products with a strong network and, in many of the markets in which it operated, was a top-four player. RBS, by acquiring much of ABN Amro’s global transaction banking business in 2007 as part of the consortium involving Santander and Fortis, instantly jumped into the big league. Previously, it had a relatively slim offering largely reliant on partner banks.
As soon as the consortium’s offer went unconditional on October 10 2007, industry chatter began about the shape of the new business, although the formal process of separation and integration of ABN Amro’s businesses could not begin until the Dutch regulator, De Nederlandsche Bank (DNB), gave its approval. Given ABN Amro’s strength in transaction banking, would RBS be happy to let its former management run the business? Apparently not.
The speculation ended in December when Brian Stevenson was moved from head of corporate and institutional banking at RBS to head of a new global transaction services division. By March, much of the senior management structure of the new business had been decided: of 14 announced positions, RBS executives have taken 10.
Some observers suggest that RBS’s ruthless imposition of its own management could undermine ABN Amro’s transaction banking business. Stevenson discusses the challenges facing the business and his credentials for the top job.
What experience do you have of transaction banking and cash management as opposed to corporate finance?
I worked for Barclays in my early career [joining in 1970] and spent a fair amount of that time – in the days when Barclays had an international network and had aspirations to be an international cash management bank – in cash management. In 1983, I moved to the US [as vice-president, corporate division] where I was mostly out on the road selling international cash management solutions to US corporations. When I came back to the UK [in 1986], I spent a lot of time designing the Chaps [bank-to-bank same-day value payment service] product. So there have been periods of my career when I’ve been immersed in transaction banking.
But I also spent time at Barclays Merchant Bank and at BZW [Barclays’ former investment banking operation] gaining a broader investment banking experience. During my time at Deutsche [which he joined in 1992], we integrated Morgan Grenfell and Bankers Trust, which I worked on and which – conceptually – is not dissimilar to the kind of work I now need to do with ABN Amro.
For the first four years, I was working in structured finance and then ran relationship management, bringing rigour and discipline to Deutsche Bank’s own business and the legacy businesses from Morgan Grenfell. After that I was chief operating officer of the global banking division, which included global transaction services. So I was fully immersed in the business during that period.
At the end of my time at Deutsche, I was sent out to Asia to effectively run the transaction banking – securities services, trade finance and cash management – and relationship management business for Deutsche Bank in Asia-Pacific. So until three years ago, I was completely involved in the transaction services business.
For the last three years [at RBS] I have not been immersed in transactions services, although RBS has been looking for some while at its options and I’ve been giving advice. But there is still some learning that I have to do for this new job.
Were you surprised to get the job?
In part, yes, and in part, no. I had been an internal promoter of the need for the bank to have a stable, sticky revenue stream as part of its core competence. So as an advocate of the business, one shouldn’t be surprised if it is suggested that one should take responsibility for it.
There was an industry expectation that, perhaps alone among ABN Amro businesses, transaction banking management would remain with ABN Amro executives. Did you understand that expectation?
Yes, there was an element of expectation. But equally, in bringing a number of RBS businesses into the equation – such as merchant acquiring and corporate cards, which were superior to ABN Amro’s offerings in those areas – there was equally a powerful argument to say that this is not 100% an ABN Amro business. The process of appointing people to run the business was fair and transparent – and there are a lot of ABN Amro people [leading the new business] and Ron Teerlink from [ABN Amro’s] board will be an executive director of this new business.
What senior departures have there been from ABN Amro during the past few months?
Obviously, Ann [Cairns, head of transaction banking] has announced her departure and will leave in the near future, although we are [currently] working closely together. We were in contention to lead the business and I got the job. There have been no other senior departures from ABN Amro [transaction banking] – indeed, there is a lot of excitement about this new global transaction services business because it is new in its shape and scale.
What does global transaction services include and how does it differ from ABN Amro’s transaction banking unit?
The concept behind the new business is to bring together the international elements of ABN Amro [transaction banking] that RBS will inherit from the consortium: all of Asia; all of North America, excluding LaSalle, which was sold to Bank of America; all of Latin America, with the exception of Brazil, Paraguay and Uruguay; and all of Europe, with the exception of Antonveneto in Italy and elements of the Netherlands business, which are being divided with Fortis. To be honest, some of the international elements of ABN Amro, while coordinated, were relatively independent entities within ABN Amro. This new division will unite them.