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The Royal Bank of Scotland (LSE:RBS) captured headlines over the weekend with two major stories. It was just three days ago, on 24 May, we reported that RBS had yet another service issue, this time with it’s mobile banking app. Of course it wasn’t especially ‘news’ to some two million who tried to access the app, but could not.
New Hire
Yesterday, the bank announced that it has hired Jon Pain to fill a newly-created, executive-level position in which he will be in charge of of “conduct and regulatory affairs.” Pain, who will join the company in August, spent several years as a managing director at the FSA from 2008 to 2011. Most recently he has been a partner in financial services at KPMG. The board more definitively described Pain’s role as “oversight of conduct and compliance globally across all RBS divisions as well as strategic leadership of the group’s relationships with regulators.”
RBS CEO, Stephen Hester, told reporters that “The creation of this position sends a clear message about how we want to do business – serving customers well, completing our return to a safe and conservative risk profile, and generating sustainable returns for shareholders. If we achieve these objectives, and do so in the right way, RBS will become a really good bank.”
Speaking of Stephen Hester
Sometimes executives’ attempts to spin a story strike me as quite odd, and often comical. Does Hester realize that he said, “If we achieve these objectives” and “If we do so in the right way“? That’s certainly inspirational. And IF they are able to, “RBS will become a really good bank.” Hello? Are you telling us that it currently is NOT a really good bank? It’s OK Mr. Hester. We already know the answer. It’s just a bit of a wonderment that you would acknowledge, by implication, at least, that you recognize the bank for what it is . . . and still be adamant that you deserve your exorbitant salary and annual bonus.
Oddly enough, the second, and certainly not the lesser, report about RBS this weekend revealed that the directors have held at least one clandestine meeting to identify a successor to Stephen Hester. The meeting was initiated at the behest of Sir Philip Hampton, the bank’s Chairman. It is believed that he presented a list of potential candidates to those in attendance. The import of the meeting is difficult to discern as the stories of its occasion are being spun for political correctness.
While, on the one hand, the report raises speculation that we could soon hear that Hester is “leaving to pursue other interests,” on the other hand, the board could simply be taking the Boy Scout approach to “Be prepared.” It could also mean that there is some division among board members as to the current and future operations of the bank under Hester’s tenure as RBS appears to be moving, slowly but surely, toward re-privatization.
