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Yesterday saw the news that Nathan Bostock, the CFO of Royal Bank of Scotland, had resigned after just three months in the job and jumped ship to join Santander’s UK arm. This came roughly six months after the resignation of Stephen Hester, who was replaced by Ross McEwan as CEO. While it’s a good idea to keep boardroom thinking fresh, this sort of turnover in managerial staff is taking things a little too far.
RBS is still predominantly owned by the UK taxpayer and overseen by the government. This in itself must cause issues, but with the government’s overriding desire to re-float the company hanging over it, these boardroom reshuffles are rather worrying.
Yesterday, after the UK markets had closed, US regulators announced they had fined RBS $100 million for its failure to suitably oversee cash transactions with sanctioned countries such as Iran, Sudan, Burma and Cuba. This $100 million fine joins the list, as the bank has also been fined €391 million for its part in the Libor-rigging scandal. Of course, RBS has also set aside more than £2.6 billion over the last couple of years for the mis-selling of PPI. With Lloyds Banking Group also being fined £28 million for its poor management of sales teams’ bonus schemes yesterday, one wonders how long it will be before similar fines appear for other banks.
With all that said, now that all the skeletons have hopefully been cleared out of RBS’s cupboard, the bank does make a more attractive proposition when the government decides to push for floatation. As my colleague David Madden stated yesterday, RBS does appear to have many fundamentally strong assets and feels a little oversold at these levels.