Hot favourite Rose backed to steer Royal Bank through Brexit fall-out

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ALISON Rose will bring Royal Bank of Scotland much-needed continuity in the face Brexit uncertainty and a deep knowledge of the institution if she is named as the successor to outgoing chief executive Ross McEwan, a senior City analyst has said.

Ms Rose, one of Royal’s most senior executives who joined the bank more than 20 years ago, has won the race to succeed Mr McEwan, according to weekend press reports. The bank remains tight-lipped on the speculation and declined to say whether the job has gone to Ms Rose, who was appointed deputy chief executive of NatWest Holdings, the bank’s ring-fenced operations, in December.

Michael Hewson, chief market analyst at CMC Markets, said appointing a candidate with the knowledge Ms Rose has of Royal Bank and the UK banking scene is the right strategy as the bank faces up to the potential economic fall-out from Brexit.

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Royal Bank has repeatedly warned of the risk Brexit uncertainty poses to the economy. Mr McEwan, who will take over the top job at National Australia Bank when he leaves Royal, said last week that the UK faces a period of “pain and anguish” with regard to Brexit, and stated his view that the economy will slow down. That came after Royal made a forward-looking provision of £100 million last year to account for bad debts rising as a consequence of the uncertainty.

Mr Hewson said that, with the bulk of the legacy issues which plagued it since the financial crisis now behind it, Brexit is the single biggest challenge which Mr McEwan’s successor will face. And in that regard, he emphasised that Ms Rose is well placed give the “continuity” she offers.

Mr Hewson said: “Someone who is not learning on the job, so to speak, and is already in situ, is the best person to hit the ground running. She won’t have a learning curve at a time when RBS is going to face some significant challenges, along with the rest of the UK banking system, if things go pear-shaped when it comes to Brexit.”

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Mr Hewson added: “She has done the job at NatWest, she has proved her worth there, so by virtue of the fact she knows the organisation inside out she would be ideal.

“She has worked with Ross McEwan, [and]she knows that Ross McEwan was looking to do. Continuity, to my mind, is the best policy as far as RBS is concerned.”

Ms Rose, who is chief executive of the bank’s commercial and private banking business, has long been touted as the favourite for the role, having been linked with the job even before Mr McEwan announced his resignation in April.

Her public profile has been raised in recent months by leading a UK Government commission which examined the challenges facing women looking to start their own businesses. The Rose report made a series of recommendations to help break down barriers, including the introduction of flexible loans to cover childcare costs and payment breaks when women have a family.

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Mr Hewson said the profile brought by fronting the report will have boosted Ms Rose’s candidacy.

Asked whether it was important for Royal Bank to appoint a female chief executive at this juncture, Mr Hewson replied: “In terms of looking at it from a cosmetic point of view, absolutely. But to my mind whoever is the best candidate should get the job.”

Other candidates to have emerged as possible successors to Mr McEwan include Alison Brittain, chief executive of Whitbread, and Ian Stuart, chief executive of HSBC UK, who had a spell at Royal-owned NatWest earlier in his career.

Mr Hewson described Mr Stuart as a “left-field” candidate, noting that the bank was a “different animal” now compared to when Mr Stuart was there before the financial crash. He joined Barclays in 2007.

Mr Hewson said: “I don’t think there is any need to parachute anyone else in, because the bank does seem to be performing fairly well. Yes, it does have its challenges, but what bank doesn’t in this low interest rate environment?

“One of the things that has been notable over the last two or three years is that the underlying business has been doing well. NatWest Markets is part of that.”

A spokeswoman for Royal Bank said: “The process to appoint Ross McEwan’s successor is ongoing. Our next CEO will be confirmed in due course, once an appointment has been made.”

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