George Mathewson

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Sir George Mathewson (born in 1940 in Dunfermline, Fife) is a Scottish businessman. His father (also George) was an electrical engineer. He was educated at Perth Academy and the University of St Andrews, from where he graduated in 1961 with a degree in mathematics and applied physics. He is best known for transforming the Scottish bank The Royal Bank of Scotland from a struggling regional player into a quasi global bank with parallels to Citigroup or HSBC. He was described by the Sunday Herald, as "banking's answer to Bruce Springsteen."

He is the convener of Scotland's Council of Economic Advisers.

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[edit] Early career

Mathewson started his career as a lecturer at St Andrews University where he did a PhD, before moving to United States to work for Bell Aerospace as an engineer in Buffalo, New York (1967-72). He was attracted back to Scotland by the opening up of the North Sea to oil exploration and joined venture capital group 3i, then called Industrial and Commercial Finance Corporation (1972-81). He was chief executive of the state-funded economic regeneration organisation the Scottish Development Agency (now called Scottish Enterprise) during the Margaret Thatcher years (1981-87). In this role Mathewson led initiatives including the creation of "Silicon Glen" - using state subsidies to help attract high-tech businesses to Scotland's central lowlands.

[edit] Mathewson's international vision

Mathewson joined the Royal Bank of Scotland, which is headquartered in the Scottish capital city of Edinburgh, in 1987 as director of strategic planning and development. The following year the Scottish bank showed signs of international ambition by acquiring the US-based Citizens Financial and by entering a long-term "strategic alliance" with the Spanish bank Banco Santander. While the first deal became the springboard for RBS gaining a significant US presence, the deal with Santander was dissolved in 2004 after the Spanish bank offended its UK partner by taking over its UK rival Abbey National.

[edit] A tough cookie at RBS's helm

When Mathewson became RBS's chief executive in 1992 the bank had been severely weakened by bad debts arising from poor lending decisions, which had been exacerbated by the economic slowdown of the early 1990s. To get the bank onto an even keel, Mathewson led 'Project Columbus', a restructuring of RBS's UK operations which included a tightening of credit controls. This earned him a reputation for ruthlessness but gave the bank a solid platform for growth. In 1998 RBS became the first ever Scottish company to make profits of more than £1 billion. He was knighted for services to Scottish business the following year.

The defining moment of Mathewson's career came with the £20 billion takeover of the much larger UK bank National Westminster Bank in February 2000. The acquisition was a sweet triumph for Mathewson, who mustered support from investment banks Merrill Lynch and Goldman Sachs to defeat RBS's fierce Scottish rival the Bank of Scotland, which had opened the bidding for NatWest. Some argue that Mathewson would not have dared to make a hostile bid for NatWest if Sir Peter Burt, chief executive of the Bank of Scotland, had not gone first.

Soon after the NatWest acquisition, Mathewson stepped down as RBS's CEO, handing the reins to his deputy Fred Goodwin, who assumed responsibility for integrating NatWest. Mathewson, who remained a keen rugby player until well into his 50s, became executive deputy chairman of the enlarged RBS Group. He became chairman in May 2001 following the retirement of former Tory politician Lord George Younger.

While Mathewson was chairman, RBS bought Cleveland, Ohio-based Charter One, which was bolted onto the bank's Citizens arm, and a five per cent stake in Beijing-based Bank of China. Mathewson stepped down as chairman in April 2006, and was succeeded by former AstraZeneca chief executive Sir Tom McKillop, who is three years his junior. He became something of an iconic figure in Scottish business circles as a result of the transformation of RBS.

[edit] Life after RBS

After retiring from RBS, Mathewson became chairman of the campaign board of the Royal Botanic Garden Edinburgh and non-executive chairman of hedge fund Tosca. He is also a non-executive director of investment company the Scottish Investment Trust, wealth managers Cheviot Asset Management and Perth-based bus and train company Stagecoach Group. He is on the board of directors of the Institute of International Finance and president of the International Monetary Conference.

[edit] Support for Scottish independence

In March 2007 Mathewson lent his support to the Scottish National Party ahead of the campaign for May 2007 elections to the Scottish Parliament. In a letter to The Scotsman, he wrote: "I do not share the fear of independence which is currently being fostered by those who have most to lose by a change in the status quo and those who see Scotland as a source of safe seats thus guaranteeing their rule over the UK." This was a reference to Labour politicians at Westminster such as Gordon Brown, John Reid and Alistair Darling who would have to leave the House of Commons in the event of Scottish independence.

Responding to persistent Labour suggestions that Scottish independence would negatively effect commerce North of the border, Mathewson added: "In addition, comments that have been made on access to the English market are patently absurd. Currently, a huge proportion of the English financial services market is supplied by companies in the US, in Holland, Germany, Ireland, etc. Globalisation is here and Scottish companies have embraced it and indeed have benefited from it."

The intervention was timed to pre-empt a visit to Scotland by Tony Blair, the UK prime minister, who had hoped to frighten Scots into believing that independence would cripple Scotland's economy. Mathewson said he believes personality matters in the battle for Holyrood. He said: "The outstanding candidate [for Scotland's first minister] must be Alex Salmond."

RBS subsequently sought to distance itself from its former chairman's views even though he earns £75,000 a year as a consultant to the bank.[citation needed]

[edit] Personal life

Mathewson has been married to Sheila, who he first met in a Perth cafe, since 1966. She was studying at Edinburgh College of Art at the time, and went on the become a fashion designer. They have two sons, Magnus and Torquil. Sir George Mathewson was knighted in the New Year honours in 1999 for services to econonomic development in Scotland and banking. His interests include rugby, golf, tennis and water sports.

[edit] Anecdotes

Mathewson has never been renowned for his diplomacy. In March 2001 he sought to play down the £2.5 million transactional bonuses paid to Fred Goodwin and himself on completion of the NatWest deal by saying they "would not give you bragging power in a Soho wine bar."