* Retail banking chief McEwan to take over in October
* Chairman says McEwan was only person offered CEO job
* To earn 1 mln stg/yr, turns down bonus for 2013 and 2014
* Bank makes 1.4 bln stg H1 pretax profit vs loss yr ago
* Shares down 1 pct after rising 5 pct previous day
By Matt Scuffham and Steve Slater
LONDON, Aug 2 (Reuters) - New Zealander Ross McEwan wasconfirmed as boss of Royal Bank of Scotland on Fridayand immediately tasked with recovering British taxpayers' cashfrom one of the biggest casualties of the credit crunch.
McEwan, 56, whose promotion comes less than a year after hearrived to run RBS's retail arm, will take over in October.
He had been widely tipped to get the job after predecessorStephen Hester was ousted by the government in June and willhave the job of completing RBS's restructuring, ensuring itsshares rise above the government's break-even price so the stakecan be sold.
Finance Minister George Osborne welcomed the appointment andsaid McEwan had impressed with his vision of RBS "as a strong,UK-centred corporate bank", focused on supporting the Britisheconomy.
"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.
McEwan was appointed as RBS said it made a pretax profit of1.4 billion pounds ($2.1 billion) in the six months to the endof June, compared with a loss of 1.7 billion in the first halfof 2012.
The bank made its first two consecutive quarters of profitsince 2008, when it needed a 46 billion pounds bailout from thetaxpayer which left the government with an 81 percent stake. RBSsaid it expects its restructuring to be largely done by the endof 2014.
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.
UP AND RUNNING
He is expected to continue slimming down its investmentbank, as wanted by many politicians and regulators.
"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 organistion to focus very strongly back onour customers and I'm looking forward to that opportunity."
He will be paid an annual salary of 1 million pounds, lessthan the 1.2 million Hester received. McEwan said he did notwant to be considered for an annual bonus for the remainder of2013 or for 2014.
"We take the swift replacement as a signal of thegovernment's urgency to take RBS closer to the end game when theTreasury can exit its holding profitably," said Chirantan Barua,analyst at brokerage Bernstein.
RBS shares are still well below the price the governmentpaid for them and which are valued at 407 pence on its books. Asale of its shares are seen as at least a year away, unlikeLloyds Banking Group Plc, where the government is setto start selling its shares soon.
RBS said its capital strength continues to improve andexpects to reach a core capital ratio under full Basel rules ofmore than 9 percent by the end of this year.
It took an extra 185 million pound provision to compensatecustomers for the mis-selling of payment protection insurance,taking its total bill to 2.4 billion pounds.
RBS shares dipped 1 percent to 330 pence by 0705 GMT,underperforming a 0.6 percent rise by the European banking index. The shares rallied 5 percent on Thursday after reportsMcEwan would be appointed and strong results from Lloyds.
Lloyds (LLOY)
