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AFP
February 16, 2020

RBS bank gets makeover under new boss

Business

AFP
February 16, 2020

London: Royal Bank of Scotland, a lender synonymous with the financial crisis, is to be renamed, new chief executive Alison Rose said as she also placed climate top of her agenda.

The first female CEO of a major UK lender, Rose added that she planned to halve the size of the RBS investment banking arm that employs around 5,000 staff -- but gave no indiction on how many jobs could go at NatWest Markets.

The announcements were revealed in an earnings statement showing the bank´s net profit almost doubled to £3.1 billion in 2019 from a year earlier.

But its share price slid 6.38 percent to 214 pence in London afternoon deals, with investors disappointed with the Edinburgh-based bank´s outlook for 2020 that pointed to "ongoing market uncertainty".

Royal Bank of Scotland Group, which runs RBS, NatWest and Ulster Bank branches, will meanwhile be renamed NatWest Group later this year.

It is the first name change since the bank was founded in 1727, although RBS branches will continue to exist.

Rose had been deputy-head of the group´s NatWest Holdings retail business and the RBS commercial and private banking division, before her promotion at the end of 2019.

"The task for Alison Rose is now to create a new legacy-free bank in her image," Neil Wilson, chief market analyst at Markets.com, said on Friday.

"The renaming of RBS to NatWest is more than a name change -- the bank is seeking to move on and put the past misconduct-ridden days behind it.

"A PR stunt it may be, but it shows us the direction that new boss Alison Rose is seeking to steer," Wilson added.

Rose has replaced Ross McEwan, who shepherded RBS through a steady recovery after its rescue during the financial crisis more than a decade ago with £45.5 billion of UK taxpayers´ cash in what was the world´s biggest banking bailout.

Despite a turnaround, the British government still owns more than 60 percent of the bank.

"The essential reason for this (name change) is as the bank has evolved from the financial crisis and the bailout, we have focused on the NatWest brand," said RBS chairman Howard Davies.

"We have exited a lot of the international businesses which were not profitable. That was branded RBS and that´s gone."

Making action on climate a priority, RBS said it would end loans for coal projects by 2030.

Rose said that "climate, and the role we can play in accelerating the transition to a low carbon economy" was among her "initial areas of focus where we can make a substantial impact".

She expressed "an ambition to take the lead in combating the causes of climate change".

Rose added: "Today, we are setting a bold new ambition -- to be a leading bank in the UK & Republic of Ireland helping to address the climate challenge; by making our own operations net carbon zero in 2020."

She said the bank would seek "to at least halve the climate impact of our financing activity by 2030, and intend to do what is necessary to achieve alignment with the 2015 Paris Agreement".

It intends also to stop lending to major oil and gas producers unless by the end of next year they have a transition plan aligned with the Paris agreement .

The 2015 Paris agreement saw nations commit to limiting global warming to two degrees Celsius (2.7 Fahrenheit) above pre-industrial levels as a way of curbing the worst impacts of global warming.

A safer cap of 1.5C was included as a goal for nations to work towards.

British energy giant BP, under the leadership of new chief executive Bernard Looney, declared Wednesday its aim to achieve "net zero" carbon emissions by 2050.