'Best CEO in the sector': Kiwi bank boss Ross McEwan steps down from RBS

RBS chief executive Ross McEwan. Photo / Supplied

At an intimate dinner with members of the Royal Bank of Scotland (RBS) board and a handful of institutional investors in 2013, shareholders made one request: please don't hire a "dull, run-of-the-mill" banker as chief executive.

Sir Philip Hampton, RBS's chairman at the time, was urged to think outside the box and consider those who might at first seem an unlikely choice.

New Zealander Ross McEwan, who ran its retail bank and previously worked at the Commonwealth Bank of Australia, emerged as an early favourite.

"It was important after the financial crisis to have senior bankers who were untainted by the crisis. Australian banks had not at that time had any material problems," says one executive who was involved in the process.

The Government, RBS's main shareholder, wanted McEwan to take the taxpayer-controlled bank into a new era after it was rescued at the height of the 2008 financial crisis.

He shrunk its international operations and in 2017 led RBS to its first profit after almost a decade of losses.

"I know the share price is down 29 per cent since his arrival, but various external factors have driven that price reduction," says John Cronin, UK banks analyst at Goodbody.

"He's played a very diplomatic game with the politicians. He's firefighting every day of the week, it would seem."

Having completed one of the "biggest UK corporate turnarounds in history", that firefighting has finally come to an end.

The 61-year-old, a Massey University graduate from Hamilton, called time on his job yesterday, hours before RBS's annual meeting and a day before it published its first quarter results.

"It's slightly odd that he'd do it the day before the results - he always signalled he'd leave in 2020, but it's about three months earlier than I thought," one investor says.

"He's done a good job - he'd have preferred to have gone with more stock sold down [the Government still owns 62 per cent], but it's mission complete."

McEwan certainly has his fans. One analyst called him "one of, if not the best CEO in the sector", adding that he leaves the group's balance sheet looking "rock solid" compared with peers, having done "a huge amount of work" since taking up the reins.

But some City analysts said that while they had expected him to announce his exit in the coming months, a departure announced before a succession plan seems "untidy" and there is "clearly unfinished business".

That said, the top job at RBS has been described as the toughest in the UK banking industry, and sources say McEwan harbours ambitions to leave the UK and return to "sunnier climes".

"He's got a farm in New Zealand and lots to look forward to," says one friend. "The RBS job is harder than most because of the politics of a controlling government shareholder and the legacy litigation."

If he does relocate, few expect McEwan to retire for a life on the beach. Australia's banking sector is fighting to clean up its reputation after a public inquiry into the country's lenders uncovered widespread misconduct and concluded that bankers were motivated by "greed".

Analysts expect National Australia Bank (NAB), whose chief executive Andrew Thorburn stood down earlier this year, to begin circling McEwan.

"I've got the sense he wants to get back to Australia and New Zealand. [NAB] would be a great fit considering his deep experience with politicians and regulators over recent years," says Cronin.

"If he's going to do anything it will be something Down Under. He's the kind of guy you can imagine enjoying meeting his mates over a pint."

One other London-based analyst echoed these sentiments, adding that if McEwan did want to stay in London, RBS was "not a bad place to be".