W&G: the never ending UK banking embarrassment
So I got it wrong – no excuses.
In a piece for The New Statesman website in June 2013 – I dared to advise the doyen of City headhunters, Anna Mann, co-founder of blue-chip consultancy MWM, to go for Ross McEwan as the new CEO of Royal Bank of Scotland.
He was then a 20-1 outsider with Ladbrokes and head of RBS’ retail unit.
To my shame, I did not back him at 20-1 or at 8-1 when the article appeared.
I did not back him at all in fact – but the UK government did duly appoint McEwan and he seemed a good bet to continue the Herculean job of turning around RBS.
Fast forward four years and the time has come to question if the £10m ($12.4m) or so, give or take the odd million pocketed by McEwan since his appointment, is merited.
I’m out of words to describe the Williams & Glyn saga – in a 2014 editorial I called it a soap opera; in 2015 an expensive shambles; and last year, I described it as an embarrassing mismanagement.
At McEwan’s first RBS AGM as CEO, what passes as RBS investors these days, Joe Public, were told that the 308 RBS branded branches in England and Wales and the six NatWest branches in Scotland would be sold off to form Williams & Glyn by the end of 2016.
Since then, the bank has burned through a few hundred million in consultants’ fees. At times when back home in Edinburgh I heard that the cost-income ratio of W&G started with a 9; that there were major problems with risk functions and technology.
I was told by one RBS staffer that RBS did not have the change capability needed – that seemed odd as I happened to know that a Change Management Consultancy had put in some of its brightest people to RBS to work on the project.
Over 100 W&G contracts were issued; several thousand staff and agency employees worked on W&G.
The end result of the W&G project – likely to be confirmed on 23 February when the bank releases its full year earnings – it is RBS so that means its annual reporting of a loss probably of about £6bn – is a fail.
McEwan has had a tough four years – as one of the first banking writers to call for him to get the top job at RBS, it seems harsh to be one of the first to suggest his time may be drawing to a close.
I would not however object if our sister title The New Statesman quietly removed my 2013 piece suggesting why McEwan was the right man for the job.