Margareta Pagano: Mending fences with SMEs is top priority for new boss of RBS

In the City

Ouch, this Kiwi knows how to pack a punch. Earlier this year Ross McEwan, the New Zealander who is to become chief executive of Royal Bank of Scotland, told a group of investors he had "been quite surprised by how bad this industry is from a retail banking perspective. I'd even go as far as to say there's not a good retail bank in the UK".

Mr McEwan had been living in the UK and running the retail side at RBS for just six months when he came to his conclusion; one that strikes to the heart of the problems in the banking system over the past few decades. Put simply, the bankers who ran our high street banks sacrificed the customer for their own egos, and pockets. Hopefully, Fred Goodwin, Lord Stevenson and all the others whose incompetence contributed to wrecking our banks will feel a shiver of shame when they hear Mr McEwan's indictment.

Such bluntness has gone down well at RBS. Its chairman, Sir Philip Hampton, UKFI, which owns 80 per cent of the bank on our behalf, and the Treasury have all been hugely impressed by Mr McEwan. He is said to be just as outspoken inside the bank, saying in no uncertain terms what needs to be done to improve services. He is already putting into practice what he preaches – a £700m modernisation plan, moving branches to where people want them, such as railway stations, updating online banking and so on.

Yet Mr McEwan, 56, isn't a professional banker. You can tell: he aims to visit at least five RBS branches a week, something most bankers haven't bothered to do for years. He has also been savvy over salary, accepting less than his predecessor at £1m a year, and, wisely, will not take any bonus until 2017.

His background gives a clue to his shrewdness. He studied industrial relations and personnel management and after college worked in insurance and investment in New Zealand and Australia for 25 years. So he came with a strong customer slant when he joined Commonwealth Bank of Australia eight years ago to head its retail operations. Like most Aussie banks, CBA is world-class for service, right down to details such as allowing customers to email bank managers direct. Now that's service.

Mr McEwan takes over from Stephen Hester at a crucial but also more positive time. On Friday RBS reported first-half profits of £1.4bn, against losses of £1.7bn last year. Mr McEwan faces a huge task with at least five big issues to be resolved, including lawsuits from investors and the timing of privatisation to whether RBS splits into a bad and good bank when Rothschild, the bank appointed by the Government, reports back in the autumn.

But the most vital will be how he handles the report published last week by Lawrence Tomlinson, the Government adviser to Vince Cable, the Business Secretary, into relations between banks and their SME customers. If Mr McEwan is as bright as he sounds, he will meet Mr Tomlinson pronto to hear his accusations that RBS, and other banks, are still behaving outrageously towards business customers.

The report is dynamite, alleging that banks load punitive charges on problem companies to maximise returns and bonuses while making directors 'passengers in their own businesses'.

As the biggest lender to SMEs, improving relations with them must be Mr McEwan's priority as RBS can't survive such a devastating critique; customers have feet and are increasingly turning to alternative finance.

If he can do this, the rest will follow; the shares will recover slowly and the bank can be sold off profitably over the next few years. Who knows, if he keeps punching RBS may even become a great bank.