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 RBS, 82 percent-owned by the government, said Cullinan will lead its
Capital Resolution Group (CRG), which will include the 38 billion
pounds ($62 billion) of unwanted assets dubbed the bad bank, as well
as the group's shipping business and the operations due to be spun
off.
The internal bad bank was announced last month as part of measures
to bolster RBS's capital and speed up its eventual privatization.
Cullinan, who had been expected to lead the bad bank, will oversee
the sale of Citizens, which analysts have valued at between $9
billion and $15 billion. RBS is planning a partial initial public
offering (IPO) of the business in the second half of 2014 and a full
sale by the end of 2016.
Cullinan will also take responsibility for offloading the Williams &
Glyns business, comprising 314 branches, which RBS must sell under
European state aid rules. An IPO of that business is targeted by
2016.
RBS said on Wednesday its entire shipping business would be placed
inside CRG and Cullinan would oversee its restructuring. However, a
spokeswoman said the move didn't mean the bank planned to exit the
shipping industry entirely.
"It's the best way of coherently managing the business to move it
under one executive to reset the strategy," she said.
Last month, sources familiar with the matter told Reuters around $4
billion to $5 billion of shipping loans were expected to go into the
bad bank, with the total shipping portfolio standing at an estimated
$16 billion. RBS declined to comment on the size of the assets being
transferred.
[to top of second column] |
Reporting to Cullinan, RBS's shipping boss, Lambros Varnavides, will
continue to lead the business up until his retirement in June next
year.
As chief executive of the bank's non-core division, Cullinan has
already played a key role in restructuring the bank, which was
rescued through a 45 billion pound bailout that left the government
with an 82 percent stake.
He and previous chief executive Stephen Hester identified 258
billion pounds of RBS's most risky loans that would be sold off or
wound down at the start of 2009, only 37 billion pounds of which
remain on the bank's books.
Hester's successor Ross McEwan will announce the results of a
strategic review in February.
($1 = 0.6157 British pounds)
(Additional reporting by Steve Slater and Jonathan Saul;
editing by
Mark Potter)
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