RBS Chairman Leaves Three Months Early

Tom Burroughes

4 February 2009

Royal Bank of Scotland, which has been partly nationalised by the UK government after suffering massive losses in the credit crunch, has announced that Sir Tom McKillop, its chairman, has agreed to step down from today, three months before his previously scheduled departure date.

He will be replaced by Sir Philip Hampton, who is deputy chairman and chairman-designate of RBS.

"While my retirement was originally planned for April 2009, I believe it is appropriate to bring this forward so that Sir Philip can complete the restructuring of the board and work with the board and executive teams on the strategy going forward. I wish Sir Philip and the board every success in this difficult financial and economic environment as they strive to restore the bank's prosperity," Sir Tom said in a statement.

Sir Tom has been criticised for not doing enough to curb an ambitious expansion drive by RBS and its involvement in ventures such as the takeover in 2007 of ABN Amro, the Dutch bank. RBS, along with Spain’s Santander and Fortis, purchased ABN Amro for a total of about €73 billion at what was then the height of the merger and acquisition boom.

RBS is the parent of Coutts, the UK private bank.

Last year, Sir Fred Goodwin stepped down as chief executive of RBS and has been replaced by Stephen Hester, who is now undertaking a full review of RBS's operations, expected to be complete later this year.

In taking over the chairmanship of RBS, Sir Philip comes with experience of holding senior positions at some of the UK’s largest corporations and banks. He was appointed chairman of J Sainsbury, the supermarket chain, in 2004. Previously, he was group finance director of Lloyds TSB from 2002 to 2004; group finance director of BT Group from 2000 to 2002 and group finance director of BG Group plc from 1997 to 2000. He also held finance director posts at British Gas and British Steel and was an executive director of Lazards from 1981 to 1990.

Sir Philip is the former chairman of UK Financial Investments Limited, the company established to manage the UK Government's shareholding in banks subscribing to its recapitalisation fund, the fund set up to bolster the balance sheets of UK banks since the financial crisis erupted.