The bank can only move as fast as society and our customers want

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OLLY Holbourn, who arrived in Jersey only a couple of weeks ago, has a hard act to follow as the new chief executive of Royal Bank of Scotland International, one of the Island’s biggest and most high-profile banks.

All his predecessors have managed to turn in a profit every year since the bank was established in Jersey in 1996, having formed from William Deacons Bank with a history going back to 1963.

The stats show a 25-year track record for RBSI, despite the banking crisis, with the most recent annual report showing an operating profit in 2021 of £358m, way above the previous year’s £99m, which was impacted by Covid. One interesting fact is that RBSI has paid out £3.9 billion in dividends since 2003 alone.

Now a member of the NatWest Group, which is still partly owned by the UK government, RBSI also has offices in Guernsey, the Isle of Man, Gibraltar and Luxembourg, which provides the new chief executive with access to a wide variety of skills, but also creates a challenge overseeing businesses in domiciles with their own unique characteristics.

But Olly is not daunted and has the backup of plenty of experience to help him meet the challenges, although his arrival in Jersey was not very auspicious. He had hardly got off the plane when he discovered he had Covid so it was a difficult time for him and his family to get used to their brand-new home.

A youthful-looking career banker with three children, Olly took a law degree at university and then spent 14 years with Merrill Lynch, which included the time that it was taken over by Bank of America. He was always based in London, although he had training in New York and a short spell in Hong Kong. Then, in the summer of 2013, his career took an interesting turn when he was approached by the UK government.

‘They said we’re looking for someone that looks a little like you, would you think about a change of tack,’ Olly recalled. ‘And so I went to work for Her Majesty’s Treasury and joined the group called UK Financial Investments, which was the entity set up, post the financial crisis, to manage the shareholdings that UK taxpayers acquired in Bradford and Bingley, Northern Rock, then RBS and Lloyds Bank.’

Olly was there for five years and ran the business for two, during which he inevitably got to know a lot of people at NatWest and so took the opportunity to move to the group in September 2018, first as head of strategy and corporate development, before working with NatWest’s chief executive Alison Rose, the first woman to hold the role of chief executive in any of the UK’s four big banks.

‘We worked on refreshing the purpose of the group and refreshing its strategy, which we announced in February 2020,’ Olly said.

‘When at UK Financial Investments, we were the government’s shareholder and we were there to protect and enhance the value of our shareholding so I got to know a lot about the group. We didn’t get involved in day-to-day decisions but we worked at a strategic level and met the chief executive, chief financial officer and all the institutions very regularly over four and a half years.’

The government used to own more than 80% of NatWest, but this is down to less than 50% as the group has climbed out of its difficulties.

Despite his experience representing its major shareholder, Olly admits that he still has a lot to learn about being chief executive of RBSI.

‘I’m going to spend the first 90 or 100 days listening, learning and reflecting, but I feel very fortunate that Alison has asked me to come over and run this business,’ he said.

‘By all accounts, it’s a well-run and successful business that is at the heart of a number of local communities across a number of jurisdictions. The background in terms of understanding the group, both as a shareholder initially and then as head of strategy, I think has been helpful.’

There is quite a long list of items on his wish list, including making banking simpler for customers and making the ‘customer journey’ better, particularly on the digital side.

‘Customer behaviour is changing, particularly with younger people who may not really want to see us, but there are always going to be people for whom that doesn’t work and is not appropriate,’ he said. ‘They need human interaction, whether that’s on a phone or a video or in a branch. Yes, there will be more digital, but only because that’s the way our customers are going. I think Covid forced some kind of helpful innovations and ingenuity, some of which are really simple.

‘For example, we were trying to work out an artificial intelligence way of determining when somebody was in a vulnerable category but then we thought, why not just set up a telephone line? That way, if they think they’re vulnerable, they will give us a call. It’s pretty basic, but it worked.’

From a cultural perspective, RBSI will also be trying to embed some of the new values announced at group level which will hopefully lead to greater trust and better long-term relationships with customers. The specific areas where they think their new strategy will help will be in learning, enterprise and ESG.

‘Hopefully, growth is on the agenda for any new chief executive but I think it’s got to be good growth and sustainable growth. One of the interesting opportunities we have is how to help both the communities in which we operate and also the private financial companies and the funds based here so that we help facilitate the transition to net zero,’ he said.

The group has already set a climate target for its balance sheet of halving emissions by 2030 and that will include helping the companies and funds they lend to and service in their jurisdictions.

However, Olly warned that the huge surge of willingness following the NatWest-sponsored COP26 summit in Glasgow last year might now be hard to sustain, faced with the energy and a cost-of-living crisis.

‘You have to be ambitious within the context of the circumstances you are facing, and the bank can only move as fast as society and our customers want,’ he said. ‘However, I was quite excited to see Chief Minister Moore’s 100-day plan, particularly on the environment and preserving the natural capital of the Island and moving to a zero-waste circular economy. That’s a bold, brave ambition, but I would say the right one if we want to preserve the natural world for our kids and their kids, and therefore we need to go on that journey.

‘I am an optimist and for the next number of months, we’ll be looking at the agenda that the new government is setting out and looking at how we can help, such as finance for the kind of sustainable houses that the government wants to build. How can we help move Jersey and perhaps the other jurisdictions in which we operate closer to a net-zero economy?’

Real progress had already been made by the bank in launching sustainability-linked loans and green mortgages, Olly said, adding that they now needed to broaden that from carbon to nature and biodiversity.

‘At the NatWest Group and RBS International, we want to play our role and want to be a leader, which doesn’t mean immediately stopping lending to businesses who we don’t think are doing good,’ he explained. ‘It means asking them if they want to come on that journey with us and, hopefully, they will. We want that long-term relationship with them and I do genuinely think that finance has a pretty important role to play.’

Describing the Royal Bank of Scotland International as ‘probably the most resilient part of the whole group’, Olly gave credit to previous managements for ‘reinventing the business when ring-fencing split the retail bank from the investment bank’.

‘They still remained profitable over the past quarter of a century. When you consider what has happened in that time, this is pretty remarkable,’ he said.

Despite coming under more scrutiny, the offshore business can also still make ‘sensible sustainable returns’, if done properly, he said.

‘Higher interest rates will help, but this has to be balanced against the needs of customers affected by inflation,’ he added.

This balancing act will be part of Olly’s responsibilities for at least part of the next 25 years as he takes on a role which will require him to keep 1,500 full-time employees in six different jurisdictions (593 of whom are in Jersey) all motivated around one common vision.

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