* RBS finance chief Bostock quits to rejoin Santander
* Bostock had been in post just 10 weeks
* To be chief risk officer and deputy CEO of Santander UK
* Shares are top fallers in flat FTSE 100, down 2.7 pct
(Rewrites first paragraph, adds comments from CEO, analyst,
By Matt Scuffham and Steve Slater
LONDON, Dec 11 Royal Bank of Scotland
chief Ross McEwan faced a fresh management headache on Wednesday
as the surprise departure of Finance Director Nathan Bostock
created a senior vacancy as the group attempts to navigate
through a period of upheaval.
Bostock, 52, has quit to rejoin Spain's Santander
after just 10 weeks in the job, dealing a blow to McEwan's
efforts to turn around the state-owned lender and adding the
appointment of a new CFO to his lengthy "to do" list.
McEwan has endured a rocky start since taking up the role of
RBS chief executive in October, undermining his attempts to
create a new customer-focused culture.
"The ... departure is a major inconvenience," one of RBS's
biggest 40 shareholders told Reuters. "Recruiting senior people
is a complicated and time-consuming process and to go through
that, only to lose the hire within a matter of months, must be
RBS shares were the top fallers in a flat FTSE 100,
down 2.7 percent by midday. Santander was up 0.4 percent.
Having been accused last month of closing down ailing small
businesses too quickly in order to grab their assets, RBS faced
more damaging publicity earlier this month when over a million
customers were left without services by a computer failure.
The bank has appointed lawyers to study the small business
allegations and admitted neglecting its IT systems for decades.
RBS was also one of several banks subjected to multi-million
pound fines by European regulators following an investigation
into the rigging of benchmark interest rates.
In addition, like other bank chiefs McEwan is grappling with
a host of regulatory demands in the wake of the financial crisis
RBS, 82 percent state-owned, had said late on Tuesday
Bostock was leaving. He is returning to Santander UK where he
previously held positions including chief financial officer.
"I look forward to competing with him in the UK market as we
strive to better the industry for our customers," McEwan said in
"He is a talented banker who brought a huge amount to our
discussions with our regulators and our majority shareholder,"
McEwan said, referring to the government.
The departure comes as McEwan works on a critical strategy
review which will be announced in February.
Bostock was expected to play a key role in the creation of
a 38 billion pound ($62 billion) internal "bad bank" to hold
troubled assets, which RBS committed to last month after the
government decided against breaking it up.
His exit creates a management vacuum at RBS, which is also
looking for a new head of its UK retail business, although the
two vacancies offer a chance for McEwan to reshape the board.
RBS is running an international search for its new retail
head and New Zealander McEwan, who previously ran Commonwealth
Bank of Australia's retail banking arm for five years,
could look to bring in overseas talent to rejuvenate RBS's top
executive ranks, according to industry sources.
RBS has said Bostock will stay until his replacement is
hired but that process could take months.
Given McEwan's recent appointment, Bostock may have opted to
join Santander UK as the CEO role there could become available
before the top job at RBS.
"In a way, we see it as an endorsement that the current CEO
is here to stay - a factor that would definitely have weighed on
Nathan's decision to leave," said analyst Chirantan Barua at
Santander said Bostock would be named chief risk officer and
deputy CEO of its UK arm, which is due to be spun off and
Santander UK Chief Executive Ana Botin has been tipped as a
possible successor to her father Emilio as chairman of the
Madrid-based group, maybe once the UK arm is floated.
"Is he going for the top job in Santander UK? It's common
knowledge that the CEO of Santander UK is seen as one of the
likely candidates for group CEO. In that case, Nathan ...
definitely fits the bill," said Barua.
Bostock spent eight years at Santander UK and its
predecessor Abbey National in a variety of roles, including as
finance chief and head of financial markets.
He left Santander in 2009 to become head of restructuring at
RBS, and oversaw the bailed-out bank shed 900 billion pounds
from its bloated balance sheet. Bostock was appointed as RBS
finance director on Oct. 1, the same day McEwan took over as
($1 = 0.6087 British pounds)
(Additional reporting by Chris Vellacott and Richa Naidu;
Editing by David Holmes)