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RBS will change name to NatWest as Alison Rose begins overhaul

Kalyeena Makortoff Banking correspondent
Photograph: Dominic Lipinski/PA

Royal Bank of Scotland’s new chief executive is renaming the group NatWest in a corporate overhaul designed to put its 2008 government bailout, and the fallout from a a string of scandals, behind it.

The lender said it was ditching the 293-year-old RBS company name, saying it was the right time to make a change at the parent company and reflect that NatWest is its biggest brand. However, the existing RBS bank branches – most of which are in Scotland – will keep their name, as will Ulster Bank in Northern Ireland.

The chief executive, Alison Rose, who took over in November, described her strategy as the “start of a new era”. The bank’s reputation was shattered after its near collapse in 2008, when the government was forced to shell out £45bn to save the bank, which is still 62% taxpayer-owned.

Since then the RBS brand has been sullied by claims that it mis-sold toxic mortgage-backed securities in the lead-up to the global credit crunch and that it pushed small businesses towards failure in order to sell their assets for profit.

Despite ditching the Scottish name, the chairman, Howard Davies, said the bank’s headquarters would remain in Edinburgh. “We’re not unscrewing any brass plaques at this point,” he said. However, Rose, the first woman to run one of the “big four” lenders, will be based in London.

The existing RBS bank branches – most of which are in Scotland – will keep their name, as will Ulster Bank in Northern Ireland. Photograph: Jane Barlow/PA

The strategy was revealed as the bank released its full-year earnings, which showed that 2019 pre-tax profits surged by 93% to £3.1bn from £1.6bn a year earlier. Its results were boosted by its disposal of a stake in the Middle Eastern bank Alawwal last year.

This is the third consecutive year of profit for RBS since its bailout in 2008. Shareholders will pocket another £968m in dividends as a result of the bank’s strong performance, £600m of which will go to the government coffers.

Rose was widely expected to reveal job losses on Friday but refused to disclose how many colleagues or bank branches would be axed as part of plans to cut costs by £250m this year.

Its NatWest Markets investment bank has been singled out for a “significant transformation”, with plans to exit parts of the business and cut its basket of risky assets in half. Rose said it was part of efforts to build a “smaller and simpler bank”.

As part of the strategy, Rose announced that RBS will also stop lending and offering underwriting services to major oil and gas producers that do not have credible transition plans in line with Paris climate agreement targets, which aim to limit global heating to below 2C.

The group is threatening similar moves against companies with more than 15% of their activities related to coal unless they have similar plans prepared. RBS also pledged to fully phase out coal financing by 2030 and is aiming to “at least halve” the climate impact of its lending activity by the end of the decade.

The value of loans to oil, gas and coal companies is relatively small compared to its peers, worth about £6bn. At its rival Barclays, lending and underwriting to carbon-intensive companies and projects totalled $85bn (£64bn) between 2015 and 2018, according to a study commissioned by campaign groups including Rainforest Action Network.

However, Rose said it was a step in the right direction: “On our balance sheet, only 1% of our lending is to the oil and gas sector, and in coal it’s marginal, down at 0.3%. But, for me, the key message here is we’re all going to need to work together; no one organisation is going to solve the climate challenge on their own and we’re very keen to work with business, with regulators, with industry to help make the plans to transition over the next 10 years.”