RBS Securities head exits after clash a month into new role

LONDON – Rory Cullinan, appointed to dismantle Royal Bank of Scotland Group PLC’s securities unit last month, is leaving the government-owned lender after a dispute with other executives, according to a person with knowledge of the matter.

He disagreed about how to implement CEO Ross McEwan’s strategy to scale back the corporate and institutional bank, said the person, who asked not to be identified because the information is private. Cullinan, 55, will leave the bank at the end of April, RBS said on Monday.

Cullinan’s departure comes as the lender mulls ways to shrink its securities division to focus on U.K. consumer banking. RBS, which posted a seventh straight annual loss in 2014, may cut as many as 14,000 jobs, or more than two-thirds of its staff at the unit, a person familiar said this month.

The move “seems like an unhelpful headline,” said Joe Dickerson, an analyst at Jefferies International Ltd. in London. “It’s not going to change the strategy around the investment bank in terms of reduction of scale.”

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A person who answered a call to Cullinan’s office said he wasn’t available for comment.

Chris Marks and Mark Bailie will become co-CEOs of the corporate and institutional bank. The unit, which employs 16,000 to 18,000 people, had an operating loss of 643 million pounds ($953 million) in the fourth quarter, up from 557 million pounds in the previous three months.

Bailie is likely to be responsible for selling and winding down assets at the investment bank, while Marks runs the parts of the business RBS wants to keep, Jefferies’s Dickerson said.

Cullinan bonus

Cullinan was the only member of RBS’s management committee to get a bonus for 2014 after running down the bad bank, housing unwanted assets, at a faster pace than projected. He was named executive chairman of CIB and capital resolution on Feb. 26 to oversee the dismantling of global trading operations.

He was previously CEO of RBS’s capital resolution group, which included its bad bank and overseeing the carve-out of the bank’s U.S. consumer unit, Citizens Financial Group Inc., and U.K. lender Williams & Glyn’s Bank.

That role came with relative autonomy, said another person with knowledge of the situation. At the securities unit, he was required to work with more people and cede some control, the person added.

“We would like to express our thanks to Rory for his very significant contribution to the rebuild of RBS over the last six years,” McEwan, 57, said in the statement.

Narrower focus

As part of the restructuring, McEwan plans to cut risk- weighted assets at the investment bank from 107 billion pounds to 40 billion pounds or less in 2019. The unit will also focus on 13 countries instead of 38.

RBS cut variable compensation for 2014 by 26 percent to 408 million pounds, with McEwan earning 1.9 million pounds and waiving a 1 million-pound allowance. Cullinan was granted a deferred stock bonus of 2.1 million pounds for 2015 that would have become open to him between 2016 and 2020. He was paid 2.2 million pounds in shares in 2014 under awards granted to him in previous years.

James Abbott, a spokesman at RBS, declined to comment on whether Cullinan is still eligible for his deferred stock bonus.

“I am pleased and proud to have played a significant part in restoring RBS to a safe and sound agenda over the past six years,” Cullinan said in the statement on Monday. “I wish all my colleagues continued success.”

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