RBS boss: Long time to rebuild trust

• 9 December 2015
• From the section Business

Royal Bank of Scotland (RBS) chief executive Ross McEwan has told the BBC that rebuilding trust in the banking fraternity will take “a long time”.

Speaking to BBC Radio 5 live on the theme of forgiveness, he said he did not think there was a “moment of forgiveness” for the banks.

He said: “This was the biggest financial crisis since the 30s and I don’t think there’s a moment of forgiveness.

“It’s just not that straightforward.”

He added: “It’s a matter of rebuilding trust and you do not rebuild trust in a matter of one year or two years. It takes a long time.

“The banking fraternity, and all of the people in it, are having to work very hard to rebuild trust, because that trust was really broken for many customers.”

Assets halved

RBS was briefly one of the world’s biggest banks by assets, after expanding with takeovers and aggressive lending in the lead-up to the financial crisis.

The bank was bailed out by the government and is still 73% state owned. It has more than halved its assets to £945bn from £2.2 trillion while also cutting its staff globally from almost 200,000 to just under 110,000.

Mr McEwan took up the role of chief executive two years ago and has waived his right to a £1m “allowance” on top of his salary.

On the subject of bonuses, he said: “If we just say to ourselves, let’s pay no bonuses, I lose really good people that are creating value for this business. I think it’s a very short-term, short-sighted approach.

“So I have to be pragmatic. I know the public don’t like that. But unfortunately I’ve got to be paying reasonable amounts of money for people to run up every day to do the jobs that I want them to do.”

Litigation

Ratings agency Moody’s last month included RBS in a list of banks still at high risk from multi-billion-dollar litigation from misdeeds in the run-up to the financial crisis.

Mr McEwant said: “My work with this, my senior team now, is to get this bank back to being a much simpler bank, a much safer bank, so that we don’t go broke again and purely focused on customers’ needs not our own, because that’s where it went wrong. We focussed on our own needs not customers’.

“We’re doing everything we can to make this a safe bank and I think we’re making really good progress. People should be pleased with what’s happening, but we’re nowhere near the finish of it.”