RBS CFO Bostock resigns after two months to join Santander
NATHAN BOSTOCK, chief financial officer of Royal Bank of Scotland Group Plc, will resign after only two months in the position to return to Banco Santander SA's U.K. unit. His departure comes six months after RBS CEO Stephen Hester announced his resignation.
LONDON – Royal Bank of Scotland Group PLC said Nathan Bostock resigned two months after becoming chief financial officer as Britain’s biggest government-owned lender struggles to return to profit.
Bostock, 53, will return to Banco Santander SA’s U.K. unit as deputy CEO and chief risk officer, reporting to the division’s CEO Ana Botin, the bank said in a statement today. The Santander, Spain-based lender in October signaled that it may delay plans to sell shares of its British business to the public. RBS hasn’t named a successor.
RBS’s latest management departure comes six months after CEO Stephen Hester announced his resignation. While Bostock was named CFO in May to succeed Bruce Van Saun from October, the bank in August announced its decision to replace Hester with Ross McEwan, 56, who joined a year earlier from Commonwealth Bank of Australia as head of the consumer unit.
“The loss of a CFO is not good news but it doesn’t change our views on the recovery of the bank as he wasn’t the key man in our thesis, the CEO is,” said Chirantan Barua, a London-based analyst at Sanford C. Bernstein Ltd, with an outperform recommendation on the shares. “We see it as an endorsement that the current CEO is here to stay - a factor that would have definitely weighed on Nathan’s decision to leave.”
Santander shares rose 0.3 percent to 6.25 euros at 10:39 a.m. in Madrid. RBS dropped 2 percent to 331.10 pence in London.
Bostock spent 10 years with RBS in roles including group risk director, before joining Abbey National Plc in 2001, where he became CFO. He replaces Jose Maria Nus as chief risk officer, who is returning to Spain in a senior role.
Santander CEO Javier Marin said in an earnings webcast in October that he doesn’t see next year as a good time for an initial public offering of the British unit. He said he would consider it again later next year.
“It’s common knowledge that the CEO of Santander U.K. is seen as one of the likely candidates for group CEO,” Barua said. “In that case, Nathan, who knows the Abbey franchise well, definitely fits the bill.”
A spokesman for Santander’s U.K. unit declined to comment.
RBS said in a statement today that Bostock informed the board of his plans to step down, with a “formal resignation” expected “soon.” He will remain in his role “to oversee an orderly handover of his responsibilities, the Edinburgh-based bank said. A successor will be announced “in due course.”
“He is a talented banker who brought a huge amount to our discussions with our regulators and our majority shareholder,” McEwan said in the statement. “While I’ll miss working with Nathan, I look forward to competing with him in the U.K. market as we strive to better the industry for our customers.”
RBS has been under pressure to shore up earnings, hurt by souring loans and past regulatory mis-steps. While the lender’s net loss narrowed in the third quarter to 828 million pounds ($1.4 billion) from 1.4 billion pounds a year earlier, it forecast a “substantial” full-year loss after transferring 38.3 billion pounds of its worst loans to an internal bad bank.
With elections scheduled for 2015, British Chancellor of the Exchequer George Osborne has been seeking to recoup the 45.5 billion-pound cost of RBS’s bailout, the biggest bank rescue in the world. The bank last month sparked criticism following a report by Lawrence Tomlinson, chairman and founder of LNT Group Ltd., saying that it pushed companies that owed it money into difficulties to help bolster earnings.
The bank hired Clifford Chance LLP to investigate the allegations, with McEwan saying RBS “over corrected for the reckless lending practices” that pushed it into a bailout.
RBS shares have gained about 1.9 percent this year, while Lloyds Banking Group Plc, which also received government aid during the financial crisis, has increased 61 percent.