SYDNEY/BENGALURU (Reuters) – National Australia Bank Ltd (NAB.AX) hired the man credited with turning around Royal Bank of Scotland (RBS.L) as its new chief executive, following the abrupt departure of its leaders earlier in the year in the fallout of a misconduct inquiry.
FILE PHOTO: Royal Bank of Scotland chief executive Ross McEwan is seen outside Downing Street in London, Britain March 20, 2019. REUTERS/Hannah McKay
New Zealand national Ross McEwan, 62, who has also held senior roles at Commonwealth Bank of Australia (CBA.AX), joins NAB as the No. 4 bank and its peers fight to win back customer trust after damaging findings at the Royal Commission inquiry into the financial sector.
Although the inquiry lambasted the whole industry for rampant fee-gouging and overly aggressive sales tactics, NAB was the worst hit of the so-called “Big Four” lenders, losing its CEO and chairman over accusations they had failed to accept responsibility for wrongdoing at the company.
“It’s going to be a tough job,” said banking analyst at Morningstar, David Ellis. “He’s facing a very hostile environment and a soft economy.”
NAB shares were 2% higher on Friday morning, following the announcement, while the broader financial sector .AXFJ was up 0.75%.
The hire presents NAB shareholders with a fresh face – but with experience in the local market – to lead the company through a period of strategic and political rebuilding, in contrast to early speculation that the company had pegged an internal candidate for the job.
When McEwan quit RBS Royal in April, that company’s chairman Howard Davies said McEwan had led the bank through “one of the biggest UK corporate turnarounds in history”.
McEwan said at the time his “only regret” at RBS was falling short on targets to improve customer service, something expected to be a major point of focus at NAB.
On Friday, he said in a statement, “it is a privilege to return to Australia and lead NAB at a crucial time for the bank, its customers, employees, shareholders and the broader community.”
McEwan quit RBS with a year’s notice. NAB said he would start by April 2020.
The appointment means NAB’s interim CEO Philip Chronican will become its new chairman, as previously disclosed.
“NAB, for 20 years or so, has been underperforming,” said Morningstar’s Ellis.
“He’s got a lot of work to do to bring NAB up to its peers”.
($1 = 1.4146 Australian dollars)
Reporting by Paulina Duran in Sydney and Ambar Warrick in Bengaluru; Editing by G Crosse and Christopher Cushing