RBS goes Kiwi for boss

And another thing.

The leading internal candidate to replace Stephen Hester as boss of RBS, the New Zealander Ross McEwan, was yesterday elected by the bank's board as the new chief executive (as the FT reported overnight).

His appointment will be announced later today, if formally sanctioned by the board of the regulator, the Bank of England's Prudential Regulation Authority.

As I said a few weeks ago, he was always the most likely to be appointed - because as an existing employee of the bank, he could not be deterred by the unattractive prospect for outside candidates of being periodically mugged by the chancellor and Treasury.

The perception - which is slightly overstated - that George Osborne bundled Stephen Hester out of his job did not commend the position to ambitious outside candidates.

Which, I am told, is an important reason why the two senior external bankers to whom RBS talked, David Roberts (ex Barclays, now a Lloyds non-exec), and Mark McCombe (ex HSBC, now BlackRock) said no to the big job.

By the way, I rather take it for granted that Roberts will be the next chair of Lloyds.


So what can I tell you about McEwan?

Well previously employed at Commonwealth Bank of Australia, he is lanky, confident and outspoken, according to his colleagues. "He is a bit of a client man, a salesman" said a colleague of his.

In a sign of the times, and like Barclays' Antony Jenkins but not Hester, he is a career retail banker, not an investment banker.

Which shows the priorities of RBS, which has been shrinking its investment bank (under pressure from the Treasury).

But investors say to me that appointing a pure retail banker does bring risks, as was shown - they would say - by Jenkins' appreciating a little later than was ideal that Barclays' investment bank has too little capital (see my blog of earlier this week for more on this).

That said, RBS would argue that its investment bank is far less important to its prospects than Barcap is to Barclays, and that it - unlike Barcap and Deutsche Bank - started to shrink its investment bank early, thus obviating the need for capital raising and more dramatic shrinkage now.

What will be the big thing in McEwan's in-tray?

That will be whether to recommend to the Treasury in just a few weeks that RBS be split into a good bank and much smaller bad bank - with the so-called bad bank being retained for many years in the public sector.

Update: 1701

I now expect the announcement of the appointment of Ross McEwan as new RBS boss to made first thing tomorrow morning, when the semi-nationalised bank also announces its first half results.