Financial News

  • 12 December 2013, 3:59

RBS Finance Chief Bostock Quits After Ten Weeks

The new chief executive of Royal Bank of Scotland (RBS) suffered a huge blow on Tuesday when his finance chief quit less than 10 weeks after he joined its board.

Sky News can exclusively reveal that Nathan Bostock, who was appointed as RBS' finance director on October 1, has resigned to join the Spanish bank Santander UK as its chief risk officer and deputy chief executive.

The timing of Mr Bostock's prospective exit from RBS is unclear, while his move to Santander is understood to be subject to regulatory approval.

Both banks were attempting to keep Mr Bostock's defection under wraps on Tuesday, until Sky News's disclosure of his move forced RBS into an after-hours announcement.

"The Royal Bank of Scotland Group can confirm that Nathan Bostock has this evening informed the Board of his intention to resign from his role as Group Finance Director," it said in a statement.

"His formal resignation is expected soon, but he will remain in his position to oversee an orderly handover of his responsibilities. Details on arrangements for his successor will be announced in due course."

Mr Bostock's exit will cause a significant headache for Ross McEwan, the taxpayer-backed bank's chief executive, who is conducting a comprehensive review of the bank's operations.

Mr McEwan is wrestling with a succession of IT problems which last month caused hundreds of thousands of the bank's customers to be left stranded after a computer systems failure.

He has pledged to overhaul RBS''approach to customers, strengthened by a new management team, of which Mr Bostock was supposed to become an integral part.

"(The) systems failure was unacceptable," Mr McEwan said in a statement. "(It) was a busy shopping day and far too many of our customers were let down, unable to make purchases and withdraw cash.

"For decades, RBS failed to invest properly in its systems. We need to put our customers' needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on."

Given his background as RBS' restructuring chief, Mr Bostock was expected to play a particularly prominent role in the creation of a 38bn internal 'bad bank' announced last month.

His defection represents the second time in as many years that Mr Bostock has left the board of one of Britain's major banks in the lurch after agreeing to take a senior new role.

In 2011, he was due to leave his position as the head of restructuring and risk at RBS to run the wholesale operations of Lloyds Banking Group, but changed his mind after Antonio Horta-Osorio, the Lloyds chief executive, took a period of sick leave.

Mr Bostock, a former Abbey National executive, was then promoted to the finance director's post at RBS after the bank announced that the incumbent, Bruce Van Saun, was leaving the UK to run Citizens, its US retail bank.

As part of a review of RBS' operations ordered by George Osborne, the Chancellor, RBS has agreed to accelerate the sale of Citizens.

It is unclear whether the Prudential Regulation Authority will look dimly on Mr Bostock's move, given the juxtaposition of the significant size of RBS' balance sheet and relative inexperience of its senior team.

Mr McEwan only joined RBS last year after a career spent in retail banking, while Mr Hester's recent departure as well as that of John Hourican, the investment bank chief, has left RBS' executive ranks thin on top-level banking experience.

A person close to the situation said that Mr McEwan's review of RBS' operations was likely to entail significant change at the bank, and that the recruitment of an outsider as his finance director looked logical in that context.

Mr Bostock's appointment as deputy chief executive of Santander UK is understood to have been accompanied by an assurance that he will be in line to replace Ana Botin as the bank's chief executive when she steps down.

Santander is expected to float its UK arm in the next couple of years.

Santander declined to comment.