RBS Loses Senior Executives to Rival Institutions Amid Banking Market Competition

Strategic Insights -

The Royal Bank of Scotland is facing a brain drain as two of its senior executives depart to join rival financial institutions. John Davison, who headed RBS' strategic investment group for four years, has left to join private equity firm KKR to run Pillarstone, its new platform for debt management and corporate turnarounds. Meanwhile, Stephen Fletcher is leaving Coutts, RBS' high-profile private bank, to join rival Arbuthnot Latham. The departures highlight the increasing competition in the banking market, with executives seeking new opportunities at upstart rivals.

Key Takeaways:

  • John Davison, former head of RBS' strategic investment group, has joined KKR to run Pillarstone, a new platform for debt management and corporate turnarounds, with a focus on sizeable firms in Europe struggling with debts of between €50m and €100m.
  • Pillarstone aims to take bespoke positions in these firms, investing new debt or equity and expecting returns in 3-5 years.
  • The platform's success depends on the underlying business's potential for rebirth, with Mr. Davison identifying two key criteria: the business's potential for growth and rehabilitation, and the presence of controls, governance, and alignment with stakeholders.
  • Stephen Fletcher, departing from Coutts, aims to expand Arbuthnot Latham's corporate business, serving companies run by wealthy clients, with a focus on personalization and catering to family businesses with turnovers between £1m and £30m.
  • Ian Walters, former MD of business banking at RBS, left to join Metro Bank in August, while several other executives have departed big banks like Lloyds and HSBC to join upstart rivals.

Statistics:

  • Pillarstone's target debt range is between €50m and €100m.
  • Mr. Devison expects the business to grow with a capacity for €5bn-€10bn in assets under management initially, with potential for further growth later.
  • The clients for Arbuthnot Latham's corporate business will typically have turnovers between £1m and £30m.

Sources:

  • Tim Wallace, author, "Royal Bank of Scotland loses pair of senior executives to rival financial institutions", The Telegraph.
  • John Davison, quoted in Tim Wallace, author, "Royal Bank of Scotland loses pair of senior executives to rival financial institutions", The Telegraph.
  • Stephen Fletcher, quoted in Tim Wallace, author, "Royal Bank of Scotland loses pair of senior executives to rival financial institutions", The Telegraph.