In a move that is expected to put more emphasis on its corporate banking capabilities here, Royal Bank of Scotland PLC reassigned several key executives in the United States and announced a senior hire.
On Friday the Edinburgh company said it had hired Ellen Alemany, a Citigroup Inc. executive with corporate-market experience, to be CEO of a newly formed RBS America unit that will house all the $1.7 trillion-asset company's U.S operations, including Citizens Financial Group, its Providence, R.I., banking unit, and the New York-based Global Banking and Markets America, which comprises RBS Greenwich Capital and its U.S. corporate and institutional banking business.
"People sometimes overlook the fact that RBS' business in the United States has a very significant corporate bank within it, as well as Greenwich Capital," said Sir Fred Goodwin, the group chief executive of RBS, in a media conference call Friday. "As we line up all of our operations across the United States, there's a very big business and corporate element, all of which Ellen is highly and directly experienced in."
Ms. Alemany, 51, was most recently the CEO of New York-based Citi's global transaction services business and a member of the $1.88 trillion-asset company's operating committee. Before that she was the executive vice president for Citi's commercial business group; she has 30 years' banking experience.
RBS also named Lawrence K. Fish, Citizens' chairman and CEO, as chairman of RBS America. And it gave Stephen Steinour, Citizens' president, the bank's CEO title as well. The company did not say when Ms. Alemany will take up her new job. (Citi announced Ms. Alemany's departure Friday and said that Paul Galant, 39, would succeed her.)
The moves came after RBS said this month in its 2006 earnings conference call that it would like to become a bigger player in the U.S. corporate market. The company said it ranks sixth in U.S. corporate banking but would like to be fourth. However, RBS executives said Friday that they are happy with the ranking of $162 billion-asset Citizens in the U.S. market, where it said it is the eighth-largest bank in asset size.
"For years our goal was to get to be a No. 10 bank, and we're there now. We certainly feel that we're big enough to compete," said Mr. Fish, 62, who will remain Citizens' chairman and an RBS board member.
"There's more to life than putting assets on the balance sheet," said Sir Fred, noting that he is "much more interested about income generation."
Last year, Citizens reported operating profits of $2.92 billion, or roughly 16% of Royal Bank's $18.4 billion, down from its 20% profit contribution in 2005, as it grappled with weaker fundamentals in U.S. banking. Last year, RBS said, the Global Banking and Markets America unit contributed 26% of full-year operating profit.
RBS executives said they are already leveraging synergies among the various U.S. operations and that Friday's announcement formalizes that effort. Meanwhile, Sir Fred said the moves do not reflect dissatisfaction with the performance of Mr. Fish or of Citizens.
"This is the right thing to do whether Citizens had a good, bad, or indifferent year last year," he said. "We're very happy with Citizens' performance. Today's appointment has to do with the growth of the overall U.S. business." Sir Fred emphasized that RBS' U.S. operations would be run by a team and said of Mr. Fish, "Larry has been and remains a key part of our North America operations."
To broaden synergies in the United States, Mr. Fish said that Citizens, which does retail and business banking in 13 states, would try to originate consumer loans that would in turn be securitized by Greenwich Capital. The company could also look to increase its profits from syndications, private placements, and public debt offerings, he said.
"As we look to the U.S. market we see growth opportunities for all of our activities," said Sir Fred, "but one that I've flagged before is the mid-corporate and commercial opportunity, where we've been building up our own resources over the last few years. It's an area of the market where there's a lot less competition than there is in the smaller businesses.''
Analysts appeared to applaud the move Friday.
Ashley Stuart, a London-based analyst at JPMorgan Chase & Co., said that RBS has spotted a niche behind some of the bigger diversified banking companies in the United States. "You also have the bigger players, like Citigroup, like Bank of America, and JPMorgan - behind them, I think, they've seen a gap," he said.
"It makes sense to have a single person presiding over Citizens and RBS Corporate Markets to develop their activities" in the United States, said Steven Hayne, an analyst at Fox-Pitt Kelton in London, in an interview.