RBS’ McEwan named head of National Australia Bank

Bloomberg

Ross McEwan, who engineered Royal Bank of Scotland Group Plc’s revival, is now taking on another turnaround job after being appointed chief executive officer of scandal-plagued National Australia Bank (NAB).
During his time at RBS, which was nationalised in the wake of the global financial crisis and beset by a multitude of scandals, the bank returned to profit and dividend payments in what Chairman Howard Davies described as “one of the biggest UK corporate turnarounds in history.” McEwan, 62, was appointed head of its UK retail division in 2012 before becoming CEO the following year.
Now, he takes over an Australian lender reeling from its own bad behaviour. The recent inquiry into misconduct in the country’s financial industry heard NAB employees accepted cash bribes to approve fraudulent mortgages, charged fees for services it didn’t provide, and downplayed the extent of the wrongdoing to regulators.
“It does take a long time to repair the reputation of an institution such as this,” McEwan told reporters in Melbourne after his appointment was announced Friday. “There’s no silver bullet.”
He has firsthand experience. RBS endured a decade of losses and was mired in several of the scandals that ensnared banks after the financial crisis — including mis-sold payment-protection insurance, Libor and foreign-exchange index rigging and the packaging and sale of
the mortgage-backed securities that fuelled the 2008 meltdown. RBS, nationalised after the disastrous takeover of ABN Amro, also had to restructure its investment bank, once one of the world’s largest.
McEwan rejected suggestions that National Australia was a “broken bank,” adding that he believes he can lead it to recovery. “One of the things that does attract me to NAB is probably a similar reason I went to RBS,” he said. “There’s many challenges here I think I can be very helpful to get the bank through.”
His appointment was welcomed by investors, with National Australia shares rising 2.2% in Sydney trading. Before joining RBS, the New Zealand-born McEwan worked at Commonwealth Bank of Australia, where he headed its retail bank for five years. “His background and his track record at both CBA and RBS add a lot,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners in Sydney. McEwan previously announced his intention to leave RBS before April 2020.
As well as restoring trust in National Australia Bank, McEwan also faces a tough operating environment as the nation’s leading banks grapple with slowing profit growth, shrinking margins and a mounting compensation bill for wronged customers. National Australia in May slashed its dividend payout 16 percent after its remediation bill topped $778 million.
“Ross is the ideal leader for NAB as we seek to transform our operations and culture firmly around leading customer service, experience and products,” acting CEO Phil Chronican said.