Some Royal Bank of Scotland Group PLC investors are calling for cuts to its investment banking unit, NatWest Markets PLC, as Alison Rose gears up to become the new CEO of the group, Reuters reported.
Rose's focus will be on cutting costs, returning capital to shareholders and finally taking the bank out of state control. Five investors reportedly told the newswire that as part of Rose's bigger vision for the group, she should consider shrinking the unit further, along with setting out detailed plans to tackle the threat from digital banks.
"For a shareholder, purely staring at balance sheet intensity and returns, it is optically a poor business," said Barrington Pitt-Miller, portfolio manager at small shareholder Janus Henderson Investors, adding that RBS now has sufficient capital buffers to absorb the losses stemming from the cuts.
A top-10 investor in the group said RBS should revisit whether it is worth persisting with the unit at its relatively small scale, and also said he is aware that other shareholders have similar thoughts, the Oct. 8 report noted.
