With a view to give Royal Bank of Scotland (RBS - Free Report) a fresh start, new CEO Alison Rose is mulling to rename the bank as NatWest Group sometime later in 2020. Also, the bank seeks to shrink its investment banking business.
The government had rescued Royal Bank of Scotland from collapse at the time of financial crisis by paying £45.5 billion, which gave it 70.5% ownership in the bank. Also, the company was involved in a number of litigations, which resulted in huge fines. The bank undertook several restructuring moves and finally returned to profit in 2017.
The change in name is not expected to affect the products and services currently offered by the company. In fact, Rose is of opinion that 80% of the bank's customers are more familiar with the name NatWest. CEO also assured that the move will not affect jobs.
Chairman Howard Davies said, “As we outline our plans for the future and with our legacy issues behind us, the Board have agreed that it’s the right time to align the parent company name with the brand under which the large majority of our businesses delivered.”
Regarding investment banking business, RBS plans to refocus its activities to directly cater to its core customers. Also, NatWest Markets restructuring and disposal costs are expected to amount to £0.6 billion in 2020.
We expect RBS’ diversified business model and sound financial position to be conducive to overall growth in the near term. Also, it remains committed to reducing costs to £250 million in 2020, and plans to continue to investing in innovations and partnerships to build revenue opportunities.
Shares of Royal Bank of Scotland have gained 21.2% over the past year compared with 6.5% growth recorded by the industry.
The stock currently carries a Zacks Rank #3 (Hold).
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