Abigail with attitude: RBS resembles a rudderless rabble

By:
Abigail Hofman
Published on:

I was interested that the renowned banker James Leigh-Pemberton, who used to head Credit Suisse’s UK operations, left the bank late last year to become chairman designate of UK Financial Investments, the British government unit that manages the taxpayer shareholdings in Lloyds and Royal Bank of Scotland.

The move surprised me. Running UKFI strikes me as a worthy but dull job. And I would have thought that if Leigh-Pemberton was considering leaving Credit Suisse, he could have found a more interesting role. However, a mole reminds me that Leigh-Pemberton was involved in advising on the restructuring of the British banks during the crisis, so brings substantial expertise to his new masters. This year there should be important developments for the two banks. The government will want to further reduce its stake in Lloyds and will want to see progress in RBS’s operations. "Look," my mole harrumphed, "Leigh-Pemberton has to do one big thing: get RBS ready for sale. And he will probably get a knighthood for doing this. What is there not to like about this job?" 
Abigail's Christmas wish list includes a pair of cashmere socks for Ana Botín's recent recruit, Nathan Bostock, in case he gets cold feet about joining Santander  
While we are on the subject of RBS, can I take a few minutes to exclaim: "What a mess!" In early December 2013, RBS’s finance director, Nathan Bostock, resigned after a mere 10 weeks in the job. Bostock will join Santander UK as its deputy chief executive. I presume Bostock – who used to work for Santander UK under the former chief, António Horta-Osório – is hoping that it will list on the London Stock Exchange in 2014. Following which, the chief executive, Ana Botín, will return home to Spain, leaving Bostock as king of the English operation. Bostock has form for resigning. He defected from Santander in 2009 for RBS. He then resigned "temporarily" from RBS in 2011 to join his old boss, Horta-Osório, at Lloyds. But when Horta-Osório took leave of absence from Lloyds because of exhaustion, Bostock rescinded his resignation and beetled back to RBS. He is now leaving RBS at a very difficult time for the bank. If I were a City boss, Bostock would be low on my list of acceptable candidates to hire. Loyalty and reliability are key attributes. Bouncing Bostock doesn’t seem to possess either.

RBS’s new chief executive, Ross McEwan, who took over from Stephen Hester last autumn, is now struggling to fill several key posts: Bostock’s job of finance director, a head for the bad-bank division and his own full-time replacement as head of the retail bank. Chancellor of the exchequer George Osborne must be regretting his decision to let Hester leave the bank. By all accounts, the two men had divergent views on the future direction of RBS’s investment bank – Hester was a fan; Osborne wasn’t interested. But at least Hester was an experienced chief executive. With his departure, the bank resembles a rudderless rabble. I am not optimistic that the government will be able to sell any of its 80% stake before the next election in May 2015.