RBS changes name to NatWest as part of strategic overhaul

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The Royal Bank of Scotland will be renamed NatWest as part of a strategic overhaul that will involve reducing the size of its investment bank, reducing the carbon emissions linked to its loan portfolio by half and reducing its profitability targets long-term.Alison Rose, the new RBS CEO, said the taxpayer-owned bank was entering "a new era" and committed to building "a more sustainable business" in the face of "unprecedented disruption."

As part of this change, the bank will stop using the 293-year-old RBS name at group level in favor of the less polluted NatWest brand, although it will continue to be used in its Scottish branch network. .

The company needs to significantly revise its troubled investment banking business at NatWest Markets and confirmed on Friday that it will attempt to reduce its risk-weighted assets - a key measure of balance sheet size - from 35 to around 20 billion. of pounds sterling in the medium term. term, including a reduction of between £ 6 billion and £ 8 billion this year.

Rose said NatWest Markets would become "a much smaller and simpler part of the business that will bring customers closer to the services they need, reduce costs, and free up capital for shareholders."

The new approach was announced as RBS reported better than expected fourth quarter results. Total revenue of £ 4.2 billion was 35% higher than the same period in 2018, although the comparison was flattered by windfall gains from the sale of a Saudi bank in which she owned a stake. Net profit for the quarter was £ 1.5 billion, a 230% year-over-year increase.

However, while its short-term results were better than expected, the company was cautious about future growth. RBS previously said it would not be able to meet its 12% return on equity target this year, but on Friday it abandoned the target in favor of a medium and long-term target of 9 and 11%.

Rose said she wants RBS to become a "goal-driven organization" that balances the interests of all stakeholders, following in the footsteps of several large groups that have attempted to divert attention from shareholder returns. during the past year. A key element in this decision will be to tackle climate change, consistent with rival Lloyds Bank's recent commitment to cut emissions from its loan portfolio by half over the next decade.

Rose said, "We are determined not only to play our part, but to lead the collaboration and cooperation that are so essential to influencing the transition to a low-carbon economy." However, she acknowledged that the decision would be difficult, not least because the bank "does not yet fully understand what it will take and how it will be done."

The bank has confirmed the previously announced departure of Mark Bailie, former chief operating officer and managing director of RBS 'digital banking initiative, Bó. Marieke Flament, who already heads RBS 'digital business bank Mettle, will also assume responsibility for Bó, which is aimed at consumers.

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