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* Retail banking chief McEwan to take over in October
* Chairman says McEwan was only person offered CEO job
* Chairman questions whether break-up of bank needed
* Bank makes 1.4 bln stg H1 pretax profit vs yr ago loss
* Shares fall 3.3 percent
By Matt Scuffham and Steve Slater
LONDON, Aug 2 (Reuters) - New Zealander Ross McEwan wasconfirmed as boss of Royal Bank of Scotland on Friday,tasked with laying the foundations for Britain to start sellingits 81 percent stake in the bank.
McEwan, 56, had been tipped to take the reins afterpredecessor Stephen Hester was ousted by the government in June.He will take over in October with a brief to complete the bank'srestructuring and lay the platform for its shares to rise abovethe government's break-even price so the stake can be sold.
Finance Minister George Osborne said McEwan had impressedwith his vision of RBS as a "strong, UK-centred corporate bank",focused on supporting the UK economy.
"I think he'll provide the leadership RBS needs as the bankputs the mistakes of the past behind it, and the governmentseeks to get the best value for the taxpayer from the money thelast government put into the bank," Osborne said.
Britain pumped 45.5 billion pound ($69 billion) into RBS tokeep it afloat during the 2008 financial crisis
Chairman Philip Hampton, who oversaw the search for Hester'ssuccessor, said McEwan "emerged as the best candidate" and wasthe only person to be offered the job after the bank hadconsidered internal and external options. His promotion comesless than a year after he arrived to run RBS's retail arm.
McEwan joined RBS as CEO for UK retail in September fromCommonwealth Bank of Australia and is considered asafe, politically acceptable choice who will increase the bank'sfocus on retail and commercial banking.
"It's really important for the UK economy to have this bankback up and running," McEwan said. "It's a major responsibilityfor me to guide this organisation to focus very strongly back onour customers and I'm looking forward to that opportunity."
Hampton said he did not expect the appointment to mark achange in strategy as RBS had already refocused as a retail bankunder Hester's stewardship, shrinking its investment bank toaccount for 20 percent of operating profit compared with 60 percent prior to its rescue.
Hester oversaw a mammoth restructuring, shedding some 900billion pounds of non-core assets, but the bank has come underpressure from lawmakers to further slim its investmentactivities. He resisted the demands, saying the investment bankprovided crucial services to RBS's corporate clients, and theissue caused friction with Britain's finance ministry.
DOMESTIC LENDING
The government wants RBS to be less complex and more likeits part-nationalised rival Lloyds Banking Group, whichis heavily focused on domestic lending.
McEwan's job is also complicated by Osborne's decision inJune to commission a review into whether RBS should be split up,with its remaining toxic assets hived off into a 'bad bank'theoretically leaving the 'good bank' better placed to lend.Britain's finance ministry is conducting the review, with thehelp of investment bank Rothschild, and will announce itsfindings in the autumn.
Hampton said the bank had looked at hiving off toxic loansin the past and had explored the option with Britain's financeministry at the end of 2010 and in 2011 but the Treasuryrejected the option at that time.
"The thing that stopped it happening in the past is reallythe complexity, the state aid rules, and, whether, especiallynow, it's worth it given our non-core assets are much smallerthan they were," he said.
RBS shares are valued at 407p on the government's books butare trading well below that level. A sale of the government'sshares is therefore likely to be at least a year away, unlike atLloyds, where the government is set to start selling its sharessoon. Hester said he believed RBS could be in shape forprivatisation by late 2014 "provided there aren't new hurdlesthat arise".
RBS made a pretax profit of 1.4 billion pounds ($2.1billion) in the six months to the end of June, from a loss of1.7 billion a year before. That was below the average analystforecast of 1.6 billion pounds and its shares were down 3.3percent at the market close leaving taxpayers sitting on a paperloss of 10 billion pounds.
McEwan will be paid an annual salary of 1 million pounds,less than the 1.2 million Hester received. He said he did notwant to be considered for an annual bonus for the remainder of2013 or for 2014.
