Royal Bank of Scotland has appointed former Commonwealth Bank executive Ross McEwan as its new chief executive as the UK government presses the bank to shrink its investment-banking operation.
Mr McEwan, 56, will replace Stephen Hester, the taxpayer-backed lender said on Friday as it swung into profit in the first half. Net income was £535 million ($907 million), up from a £2 billion loss in the corresponding period a year earlier.
Mr McEwan, a New Zealander, who heads RBS' retail operations in the UK, had emerged as the leading candidate to take over from Mr Hester, who announced his resignation in June.
Mr McEwan joined RBS last August, having run CBA's retail banking arm for five years.
While at CBA, he was interviewed for the top job that went to Ian Narev.
It is believed a recent presentation by UK Financial Investments chairman Robin Budenberg to the RBS board had helped swing the decision Mr McEwan's way. UKFI manages the UK government's 81 per cent stake in the bank.
At the presentation, Mr Budenberg was critical of RBS' investment bank, and raised questions over its capital deployment. It is thought that presentation was one of the final blows to Mr Hester's tenure.
Mr Hester resigned two months ago following pressure from the UK Treasury, amid concerns about the direction of the bank and his determination over the strategy for RBS' investment banking arm.
Earlier this year Mr McEwan expressed surprise at the bad shape of the UK's banking industry and said the sector was behind in technology.
With the UK once regarded as a leader in global banking, Mr McEwan said banks had fallen behind since the global financial crisis.
With more than 2200 branches, RBS' retail business is twice the size of CBA's.
In taking the role as RBS' head of retail banking Mr McEwan stepped into the position made vacant by banker from Australia, Brian Hartzer.
Mr Hartzer, a former ANZ executive, is now heading Westpac's Australian businesses.
At CBA, Mr McEwan was largely responsible for implementing the strong customer service drive of former chief Ralph Norris.