Deputy head of retail banking arm will also be first woman to lead one of UK’s big four banks

This article is more than 1 year old

This article is more than 1 year old

Alison Rose will be the first woman to lead one of Britain’s biggest banks after Royal Bank of Scotland named her as its new chief executive.

RBS ended months of speculation when it confirmed Rose, the favourite for the job, will take over from Ross McEwan on 1 November.

The 49-year-old has worked at RBS for 27 years and is deputy chief executive of NatWest Holdings, RBS’s retail and commercial banking division. Rose also runs RBS’s commercial and private banking business, including Coutts.

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Rose will be the first woman to run RBS and the first female chief executive of one of Britain’s big four banks – RBS, HSBC, Barclays and Lloyds. She will be paid a salary of £1.1m plus £1.1m in shares and £26,250 in other benefits, taking her basic pay to more than £2.2m a year.

Rose will also be eligible for an annual bonus in shares worth up to 175% of her salary and a pension contribution worth £110,000 a year. Her salary is £100,000 a year more than McEwan’s because he did not take a pay rise in the past six years.

RBS said Rose’s pay was “restrained” compared with other bank chief executives. McEwan, who is joining National Australia Bank as chief executive, is classed as a “good leaver” and will be eligible for up to £7.8m in share awards over a number of years.

RBS has been looking for a new boss since McEwan announced his departure in April. The taxpayer-backed bank was reported to have selected Rose last month and was waiting for approval by regulators.

Rose beat other candidates, thought to include HSBC’s UK head, Ian Stuart, the Whitbread chief executive, Alison Brittain – who used to run Lloyds’ retail bank - and the RBS chief operating officer, Mark Bailie.

McEwan put RBS on a financially stronger footing during his six years in charge but he leaves Rose with the task of repairing the bank’s reputation after a series of scandals including poor treatment of struggling business customers by its global restructuring group. She will have to steer RBS through choppy economic waters, especially if the UK leaves the EU without a deal.

Rose will also need to guide RBS back to full private ownership under a government plan to shed the 62% stake owned by taxpayers by 2024. RBS was bailed out by the government during the financial crisis to protect the wider system.

If Labour forms a government at the next election, she will have to deal with the party’s plans to keep RBS, the biggest lender to UK businesses, in public ownership and direct it to support economic growth as part of a “public banking ecosystem”.

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Rose said: “Our industry is facing a series of challenges: from the ongoing economic and political uncertainty to shifts in the behaviour and expectations of our customers, driven by rapid advances in technology.

“It will be my priority to make sure we are ready to meet these challenges and build the best bank for families, businesses and communities.

“We will be driven with real purpose in our work to help achieve the goals and potential of our customers and be there for them at key moments in their lives.”

Before Rose’s appointment the most senior woman in British banking was Ana Botin, who ran Santander’s UK business from 2010 to 2014. Jayne-Anne Gadhia also ran Virgin Money from 2017 until the business was bought by CYBG, the owner of Clydesdale and Yorkshire banks, last year.

When Rose starts her new job she will take the number of female FTSE 100 chief executive back to six from five after Véronique Laury leaves Kingfisher next week. There were seven women bosses in the FTSE 100 until Direct Line, run by Penny James, was demoted from the index this month.

Rose has worked to improve prospects for women in business by leading a Treasury-commissioned review into barriers for female entrepreneurs, known as the Rose review. She also appeared in Downing Street last month to launch a pledge by banks to increase funding for female business owners.

Shares in RBS were up more than 3% on Friday.