As I See It: Terry Murden
It has been a long wait, 292 years to be precise. On Friday Royal Bank of Scotland appointed Alison Rose as its first female chief executive and it was hailed as another crack in the glass ceiling.
Other women have risen to the top of British banking: Debbie Crosbie this year moved from Clydesdale to become CEO at TSB; Lady Rice was CEO at Lloyds TSB Scotland and Ana Botin held the same position at Santander UK. But Rose is the first female CEO of one of the big four British banks.
Now the focus is on the task she faces, essentially ‘finishing’ the long turnaround job which began under Stephen Hester, who was parachuted in after the 2008 bailout, and was continued by the New Zealander Ross McEwan.
Unlike her two immediate predecessors, Rose is a company veteran with 27 years spent at RBS. She has therefore been through its expansion under Sir George Mathewson and Fred Goodwin and its subsequent fall from grace. But her banking credentials will be only part of the test ahead.
Running RBS also requires political diplomacy. Hester fell out with the Treasury over the downsizing of the bank. McEwan picked up the baton and has done just that, also returning it to profitability and restoring the dividend.
But he failed to sell the Williams & Glyn business and the share price has remained stubbornly well under the price paid by the Treasury which has been anxious to get the remaining 62% shareholding off its books and divert the proceeds into the public purse.
Now that PPI and most of the other legacy issues are moving down the agenda, the Treasury has no doubt tasked the new CEO with getting it in shape for a full transition to private ownership. Jeremy Corbyn may yet have something to say about that. As Russ Mould at AJ Bell reminds us, a Corbyn-led government, whether Labour or some form of coalition, might look to keep the bank in public hands to use it as a vehicle to support domestic economic growth.
In an interview in May, RBS chairman Howard Davies said “people are starting to worry” about what the Labour leader may have in store for the banks should he be elected. Labour has said it would not be selling more RBS stock, prompting Davies to ask if that is a stable position.
Operationally, attention will focus on whether the new CEO halts or reverses the drift in control of the bank to London and if she favours a strengthening of its Edinburgh base. Her approach to the branch network, following the carnage that has been wrought during the McEwan years, will be closely scrutinised. Indications are that there will be no let up in the focus on mobile banking which is not only seen as a result of technological change and customer convenience, but is a key means of driving down costs.
As the bank’s balance sheet becomes more robust, and assuming it does return to full private ownership, Rose may be able to build a new acquisitions strategy, perhaps targeting some businesses that will help it achieve primary objectives more quickly. It began this process under McEwan through the purchase, for instance, of the Edinburgh-based accounting business FreeAgent.
Inevitably, her gender will be a focus for attention as much as the strategy she pursues.
The number of women heading Britain’s biggest companies remains small. When Rose takes up the job in November she will restore the number of female CEOs in the FTSE 100 to just seven.
However, with Katie Murray as chief financial officer Royal Bank of Scotland will become the only FTSE 100 company to have women in its top two executive positions. Without wishing to stereotype female executives, it does give them the unique opportunity to bring about a change in the machismo-driven culture in the banking sector that failed the customer and the industry itself.
Feeling blue over alcohol-free beer
I spent an enjoyable evening at the Scottish Beer Awards last week, though I was a shade disappointed that despite this being a celebration of 300 brands, some with weird names such as Disco Forklift Truck, Panavision Pink and Green Monkey Wheat, the only non-alcoholic choice was a rather unoriginal Becks Blue from the bar.
It may seem almost counter-intuitive to attend such an event and not want to imbibe, but I was driving – and effectively on duty – and drinking non or low alcohol alternatives is an increasing matter of choice, not just for me, but for thousands of others.
The days of low alcohol beers more akin to washing-up liquid are long gone. Nowadays there is a good range so that in many cases it is difficult to tell the difference. There has been a rise in a new ‘temperance’ movement. Research by brewing giant ABInbev UK found that 41% of young people are pursuing a healthier lifestyle by actively cutting down on alcohol. This year also saw Sainsbury’s launch ‘The Clean Vic’, a pop-up pub in central London which exclusively serves no, or low, alcohol drinks.
It is great to see fine beers celebrated as they were on Thursday night in a long list of categories for best pilsner, pale ale, stout, ‘amplified’ beer, and many others. Perhaps the time has come to add one more category.