The new boss of Royal Bank of Scotland has sought to reassure staff about the result of an on-going review into whether to hive off a "bad" bank out of the bailed out lender.
Ross McEwan, who took the helm of the 81% taxpayer-owned bank at the start of the month, urged staff to remain focused on clients and not be distracted by speculation about whether a bad bank – potentially carrying £120bn of troubled loans – will be split off.
The New Zealander gave few clues about the timing of the review – commissioned from bankers at Rothschild by George Osborne – other than to say it would be concluded "at some point soon".
"I will share our decisions with you as soon as I can," said McEwan, who was promoted from running the retail bank after Stephen Hester was ousted.McEwan is expected to outline his ideas for rationalising the bank and putting greater emphasis on customer service early in the New Year. He said the review would resolve an outstanding uncertainty about the future of the bank, bailed out five years ago with £45bn of taxpayer money.
"The future of this company will not be about whether we operate in particular areas or where our problem assets sit. The future of this company is about how good a job we do for our customers, including those who are having difficulty repaying their loans. And it will be about how well we live up to all our responsibilities, particularly those we have to the UK," McEwan.
"Most of you come to work everyday to do your jobs for customers and are not consumed by the speculation that swirls around the bank. But the debate you read about in the papers – and that has taken up too much time of the management team – has been about what is now a small proportion of our activity. We are taking responsibility for resolving these debates," he added.
The bank is scheduled to report its third quarter results on 1 November and it is not clear if the government will announce the outcome of the Rothschild review before that day. RBS has warned that the shareholders who own the 19% of the shares not owned by the government may also need to back any decision to create a separate bad bank.
The City is concerned about the slow growth inside the "core" part of RBS and Ian Gordon, banks analyst at Investec, forecast it could slip back into the red in the third quarter, a disappointment given that it had only just reported its first two consecutive quarters of profits since its 2008 bailout.
Gordon said the view in the City was that a "meaningful separation exercise will be imposed" on RBS. There has also been speculation that McEwan could sell off the US operation Citizens rather than float it off on the stock market. But Gordon said a quick sale might not fetch such a high price.
guardian.co.uk © Guardian News and Media Limited 2010