NatWest is to embark on the hunt for a new chairman after Sir Howard Davies announced he would step down from the board of the taxpayer-backed bank next year.
Davies has served on the board of the FTSE 100 lender for almost eight years. If he remains beyond July next year he will have exceeded the nine-year limit after which directors are no longer considered to be independent under the City’s corporate governance code.
He said yesterday that it would be appropriate for the board to start the search for his successor. “This will allow time for a rigorous search process and an orderly handover, which I expect will take place at some point before I reach nine years’ tenure,” he told shareholders at NatWest’s annual general meeting in Edinburgh.
Davies is a City veteran who was previously a deputy governor of the Bank of England and was the first head of the Financial Services Authority, the now-defunct regulator set up in 1997.
His tenure at NatWest has included handling the legacy of the group’s £45.5 billion bailout during the 2007-09 financial crisis when the lender, then called Royal Bank of Scotland, was rescued by the taxpayer in return for an 84 per cent stake. Davies joined the board in July 2015 and became its chairman the following September, just weeks after the government executed its first sale of NatWest shares. Its stake has dropped below 42 per with all the sales resulting in a loss for taxpayers.
NatWest shares are down by about a quarter since Davies became chairman.
He said that eight years ago the bank was “an outlier” in terms of stock market valuation but that “we are now trading at about book [value] and in European banking terms, pretty good.
“I had my arm twisted to be the chairman . . . I don’t think it is going to be a problem finding my successor.”