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RBS boss Ross McEwan: UK financial sector 'better off' in EU

Ross McEwan Image copyright Getty Images

The chief executive of Royal Bank of Scotland says he believes the UK financial sector would be better off inside the European Union.

Speaking in an interview with BBC Newsnight, Ross McEwan said the uncertainty caused by the EU vote could "slow down banking".

He said he would like the referendum to be held as early as possible, ideally in June.

Mr McEwan added that he does not expect an interest rate rise before 2017.

The UK is due to hold a referendum on whether or not to stay in the European Union, before the end of 2017.

In an interview with Newsnight's Kirsty Wark Mr McEwan said he had seen no "economic data that suggests we'd be better off out in the short to medium term".

He said unpredictability around the referendum was causing problems for the UK's banks.

"The issue we've got is the uncertainty which slows businesses down, which will over time slow down banking so it's... really good that the government is trying to have the vote very quickly."

Low rate environment

On interest rates, Mr McEwan said he sees no prospect of any rise from the Bank of England in the near future.

"We're going to have lower interest rates for a lot longer than was anticipated… I don't think [we'll have rate rises] for all this year and possibly all of 2017 as well.

"We just have to get used to an environment where we have low interest rates for a long period of time."

Mr McEwan suggested RBS had turned a corner under his leadership, but that it was likely the firm would post its eighth consecutive years of losses later this month.

The bank has set aside considerable sums to pay for US-imposed fines over mis-selling of mortgage-backed securities and payment protection insurance (PPI) payments.

Taxpayer loss

In line with other banks the share price of RBS has declined by nearly 45% in a year. The firm remains largely in public hands, with the British government owning a 73% stake, after a £45bn ($65bn) bailout in 2008.

Chancellor George Osborne sold 5% of its stake last August, making a loss. The share price has fallen still further since then.

Asked if the British taxpayer is likely to get its £45bn back, Mr McEwan said: "At this rate no… We'd love to get that money back to the public because it's the public's money.

"But at the time, if they hadn't saved RBS then a lot of the financial services in the UK would have probably collapsed."

The full interview with the chief executive of Royal Bank of Scotland Ross McEwan will be broadcast on BBC Newsnight at 22:30 GMT on Friday 12 February. You can also catch up on iPlayer (UK only)

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