RBS stock popped 6% today after the European Union decided it will not force the sale of its Williams & Glyn unit.
That will be welcome news for CEO Ross McEwan. To put it in perspective, this is RBS’s 10-year stock performance — down 93%:
The UK government still owns most RBS shares, a legacy from the 2008 crisis. Insiders say McEwan — who has been the boss at RBS since 2013 — may be thinking of leaving. Sources told the Financial Times:
“‘Ross is so pissed off,’ says a former senior RBS executive who left recently. ‘I’d be staggered if he was still around in a year’s time.'”
In the same FT report, the bank and McEwan rejected claims that he would be leaving soon, and said in an interview: “This is one of the hardest jobs in banking. I want to see it through. We’ve done most of the hard work on this bank. I’m starting to feel actually quite good about 2017. Lots of issues to deal with. But the core [bank] is starting to work.”
A source close to RBS told Business Insider that “he is not planning on leaving any time soon.”
But at the moment, RBS shares are going nowhere until the bank clears its legal liabilities, and until after the government sells its holdings.
RBS has set aside £8.3 billion ($US10.3 billion) for legal bills, according to the FT. Only when the downside and dilution are behind it will RBS shares become worth buying.
Until then, the bank is trapped. One “top 10 shareholder” told the FT:
“All the litigation issues have eaten away at the excess capital. So there is no capital for dividends or to invest in the business.”