Royal Bank of Scotland (RBS) has announced a new strategy under the leadership of its new Chief Executive, Alison Rose. The bank, which reported better than expected pre-tax profits of 4.2 billion pounds for 2019, is looking to make significant changes to its operations.
One of the key changes includes cutting back the size of its loss-making investment bank and rebranding the company as NatWest. This move is aimed at shifting the lender’s image away from its 2008 taxpayer rescue of 45 billion pounds during the financial crisis.
Under the new strategy, RBS plans to halve investment bank NatWest Markets’ risk weighted assets to 20 billion pounds and set green targets to reduce the impact of the bank’s climate financing by 2030. Despite the positive financial results, the bank faced challenges such as a loss at NatWest Markets and a provision for compensating customers mis-sold loan insurance.
RBS also announced plans to reduce its core capital buffer and target a return on equity over the medium to long term. The bank will slightly ease the pace of cost-cutting but is still expected to result in significant job cuts. Additionally, the boss of digital bank Bo has resigned, raising concerns about the venture’s commercial viability.
Overall, RBS is entering a new era under Alison Rose’s leadership, with a focus on sustainability and delivering better outcomes for customers and shareholders. The bank’s strategic changes and financial results will be closely watched by investors and industry analysts in the coming months.