ROYAL Bank of Scotland chief executive Ross McEwan has said he regrets he has been too busy dealing with issues from the past to focus more on customer service.

Speaking after the taxpayer-owned bank announced that Mr McEwan is to step down, the New Zealander said RBS had made good progress since he joined in 2013.

He said it felt the time was right for him to move on after leading a shake up which has left the bank focused on the UK with a more efficient cost base.

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RBS returned to profit in 2017 after incurring years of losses in the wake of the £45 billon taxpayer bailout it received amid the financial crisis in 2008.

However, Mr McEwan told journalists: “The only regret I have is that we, because of all the conduct, litigation, restructuring issues we dealt with that I haven’t done enough on the customer service delivery.”

Mr McEwan said the priority for whoever succeeds him must be to stay focused on customers.

He defended the controversial branch closure programme he has presided over, which has taken a heavy toll on Scotland, noting the way customers interact with banks is changing dramatically as technological advances disrupt the sector.

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“If we hadn’t reshaped then there would have just come time when we would have had to reshape it,” said Mr McEwan before the bank’s general meeting at its headquarters complex in Edinburgh.

“We will not be closing any further branches in 2019 and have no plans to reduce the branch network,” he told the meeting, adding: “The full focus of the organisation is now on serving customers well without the distractions this bank has had.”

He reckons the bank is in good shape after delivering a strong financial performance for the second year running in 2018.

This allowed RBS to announce a £1.6 billion final dividend in February, resulting in a near £1 billion windfall for the taxpayer. The UK Government owns a 62 per cent stake in the bank.

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But Mr McEwan also highlighted the challenge posed by Brexit for the bank which has exited a wide range of countries on his watch.

He said the continued uncertainty around Brexit is holding back the UK economy, with the most recent forecasts pointing to subdued growth rates relative to historic trends.

“As a large predominantly UK focused bank, our results will of course reflect the economic performance of the UK,” said Mr McEwan.

He added: “We will continue to support our customers with lending – where there is demand and within risk appetite.”

Royal Bank’s chairman Sir Howard Davies said while the prospect for the economy is “more than usually uncertain” Mr McEwan had got the lender into a good position to succeed in a rapidly evolving landscape for the banking sector.

“Ross’s successful execution of his strategy to refocus this bank back on its core markets here in the UK and Ireland has helped complete one of the biggest UK corporate turnarounds in history,” said Sir Howard.

He noted RBS passed a landmark in July when it reached a settlement with the US Department of Justice following an investigation into the bank’s historic activities in the country’s mortgage market.

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“The £3.6 billion we paid was a stark reminder of how, in the past, RBS engaged in highly risky transactions a long way from its core mission of supporting the UK economy,” he said.

RBS is awaiting publication of the Financial Conduct Authority’s final report following an investigation into its now defunct Global Restructuring Group.

Sir Howard noted the FCA confirmed last year that no evidence had been found to support allegations that RBS had artificially distressed and transferred otherwise viable businesses to GRG to profit from selling them.

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He said the bank had long recognised that some SME customers did not receive the treatment they should have while in GRG and was focused on putting things right for them.

The bank faced calls to do more to tackle climate change at the meeting where the directors’ remuneration report won the support of 99.23% of votes cast.

Mr McEwan has a 12 month notice period and will remain in his position until a successor has been appointed and an orderly handover has taken place

Sir Howard said the search for a successor will start immediately, with the bank casting the net internally and externally.

RBS shares closed down 6.7p at 250p. The Government acquired its holding at 502p per share.