Return of the retail banker

With the Royal Bank of Scotland (RBS) appointing Ross McEwan as chief executive last month (following the appointment of another retail banker in Antony Jenkins as CEO of Barclays last year), we find ourselves – probably for the first time in the history of UK banking – in a unique position: two major British banks are now helmed by retail bankers.

The similarities do not end there: both gentlemen replaced investment bankers (Stephen Hester at RBS and Bob Diamond at Barclays) who failed to endear themselves to regulators, thanks to a number of controversies and scandals, most notably LIBOR rate fixing.  Interestingly, both appointments come with modest compensation packages and there have been brave statements made by the new appointees about culture change and purging the short-term, deal-orientated investment banking attitude and replacing it with transparent, customer-orientated banking—aspiring to a sensible, even old-fashioned approach.

This new-found affection for retail bankers is clearly not a coincidence; at least one hopes not. The key question that comes to mind is whether this trend represents a short-term response of the banks and the regulators to regain some credibility with the taxpayers and the media after the ‘rogue era’ of investment banking. Or is it a reflection of a more lasting strategy shift towards a ‘back to basics’, simplified style of retail banking.

Or might the ascendancy of retail banking executives be a forerunner to the implementation of the Vickers report, which recommends separation of Investment and retail banking activities?

Time will tell, but retail bankers can (at least for now) feel heartened by the fact that they are finally being noticed!

About VenkatSarma 2 Articles
Venkat is a Banking & Risk professional with over 25 years of industry experience and in-depth exposure to markets in Asia, Middle-East, Western & Eastern Europe and Americas having handled country, regional and global assignments with American Express in India & Asian markets, ABN Amro Bank in Dubai & Amsterdam and Renaissance Capital in Moscow. Venkat is a specialist in Retail Banking & SME/ Middle Market having held several senior risk roles including that of Group Portfolio Risk Head for ABN Amro Bank in Amsterdam with oversight responsibility for global retail & SME portfolios of the bank till 2010. Presently, Venkat is the Group CRO for TBIF, in a private equity type environment with a singular focus on driving value enhancement for investors alongside asset protection through appropriate risk mitigation measures in high risk CEE markets. Additionally, as a board member & Executive Director of a recently acquired bank in Bulgaria (part of the TBIF group), Venkat is responsible for strategy & performance management apart from overall responsibility for all Risk aspects at the senior-most level.

1 Comment

  1. Whether the banks are headed by a ‘Retail’ banker or an ‘Investment’ banker is a moot point. So long as we are bereft of ‘values’ in a critical industry like Banking, we would continue to witness greed overtaking and jeopardizing Financial Institutions.

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