RBS share price heads south as CEO steps down

Shares in Royal Bank of Scotland (LON:RBS) have fallen deep into the red in today’s session as the company said that its chief executive Ross McEwan was stepping down. The move comes as the lender prepares to update investors on its first-quarter performance tomorrow, following blue-chip peer Barclays (LON:BARC), which posted results this morning.

As of 10:37 BST, the RBS’ share price had given up 1.25 percent to 253.50p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.26 percent lower at 7,452.46 points. The group’s shares have given up more than four percent of their value over the past year, as compared with a near one-percent gain in the Footsie.

Ross McEwan steps down

RBS said in a statement today that Ross McEwan had resigned from his role as Chief Executive Officer and executive director. With McEwan having a 12-month notice period, he will remain in his position until a successor has been appointed and an orderly handover has taken place. The company said that it will confirm the effective day of his departure in due course.

“For the past five and a half years Ross has worked tirelessly to make the bank stronger and safer and played the central role in delivering a return to profitability and dividend payments to shareholders,” Chairman Howard Davies commented in the statement, adding that McEwan’s “successful execution of the strategy to refocus the bank back on its core markets here in the UK and Ireland has helped to deliver one of the biggest UK corporate turnarounds in history”.

Analysts weigh in on move

Proactive Investors quoted Shore Capital analyst Gary Greenwood as commenting that McEwan had been in place as RBS ‘resolved all of its major legacy issues,’ though he said “significant further work remains to improve profitability and returns”.

He added that McEwan's 12-month notice period should provide ample time to find a suitable successor without any major disruption to the management of the business.