Ross McEwan doesn’t have an enviable job. Yes, he gets a couple of million a year to run one of the country’s biggest banks, but being RBS chief executive won’t win you many plaudits.
The loss-making, majority state-owned bank just made – you guessed it – another loss. It wasn’t small either - £2bn in six months - but for RBS that’s unremarkable.
RBS has suffered eight consecutive full-year losses (take a wild guess what started it), including three since McEwan took over in 2013.
Here’s McEwan’s problem. His mission is to turn RBS into something smaller and sustainable that the government would be proud (and able) to sell. His goals are to reduce costs and clear out all those hideous risk-weighted assets acquired during the era of his predecessor-plus-one, Fred ‘The Shred’ Goodwin.
But performing well against these objectives doesn’t do anything about the eye-watering losses (£53bn since the crash and counting), which are all most people see.
It’s why, in February, he handed back £1m from his share incentive scheme. It may be utterly unfair, but the fact remains it looks like he’s in charge of a company losing the public’s money, which makes big salaries a reputational no-no.
In fact, RBS’s losses these days are predominately the result of litigation and misconduct costs on the one hand and restructuring costs on the other. Within a few years, however, these could finally wind down.
The deadline for PPI claims is in 2019, the same year McEwan’s ahead-of-schedule restructuring is due to complete. US claims over pre-financial crisis toxic mortgages are likely to be resolved one way or another before then, while the bank has already cut through most of its once towering pile of risk-weighted assets.
We’ll have to wait and see whether McEwan will indeed transform RBS into a sustainable, healthy, profitable business again. If he does, he’s unfortunately unlikely to get the credit he deserves. After all, if you ask people to name the business leader they admire the most, who ever picks the one who managed decline well?