Royal Bank of Scotland (RBS.L) has named Alison Rose as its new chief executive, replacing outgoing boss Ross McEwan.
Rose is currently deputy CEO of NatWest and CEO of commercial and private banking at RBS. An RBS lifer, she was widely tipped as the likely replacement for McEwan, who announced he was leaving in April.
Rose will become the first woman to lead one of the UK’s biggest banks. Jayne-Anne Gadhia was CEO of Virgin Money until its takeover last year, but no woman has run one of the traditional high street giants RBS, Lloyds, Barclays, or HSBC.
“I am delighted that we have appointed Alison as our new CEO,” RBS chairman Howard Davies said. “She brings extensive experience and a track record of success from her previous roles at the bank.
“Following a rigorous internal and external process, I am confident that we have appointed the best person for the job.”
Rose said: “It is a huge honour to have been appointed as the new CEO of RBS and I am looking forward to getting started. As one of the oldest and most important financial institutions in the UK, we have a key role to play in supporting the economy and championing the potential that exists across the country.”
McEwan will formally retire on 31 October and Rose will take up the position on 1 November. The timing could make for a hectic first day, given that the UK is officially set to leave the EU on October 31.
“Our industry is facing a series of challenges; from the ongoing economic and political uncertainty to shifts in the behaviour and expectations of our customers, driven by rapid advances in technology,” Rose said.
“It will be my priority to make sure we are ready to meet these challenges and build the best bank for families, businesses and communities. We will be driven with real purpose in our work to help achieve the goals and potential of our customers and be there for them at key moments in their lives.”
Russ Mould, investment director at stockbroker AJ Bell, said: “One of the key challenges will be managing the transition back to full private ownership – a tricky task given the remaining 62% government stake.
“Rose also faces a likely challenge from the economic fallout associated with Brexit, in particular the risk of a spike in bad debts.”
Rose, who has been at RBS for 27 years, will be paid £1.1m a year with a share-based bonus of up to 175% of her salary, RBS said. She will get a share allowance of up to 100% of her salary and annual benefits of £26,250. RBS said it was “a restrained pay position in terms of comparable roles.”
McEwan, who led the bank for five years, will continue to receive share awards as part of long term bonus schemes entered into. He is set to join National Australia Bank as CEO after leaving RBS.
McEwan led RBS to its first profit in a decade in 2018, as the part state-owned lender eventually began to recover from the legacy of the financial crisis. However, the share price has been depressed this year, after the bank warned Brexit would hit performance and amid continued large charges for historic PPI mis-selling.
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.