Vallance enters the fray for RBS chairmanship

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The Independent Online
SIR IAIN VALLANCE, the chairman of British Telecom, has been approached about taking over the chairmanship of Royal Bank of Scotland from Viscount Younger, the former Conservative cabinet minister.

The approach is understood to have been made recently, and indicates that a succession battle may be about to break out at the bank.

George Mathewson, RBS chief executive, has made no secret of his desire to take over as chairman of the company when he retires from his present position in May 2000.

Viscount Younger is scheduled to retire nine months after that date, but he is keen to see the succession issue settled well in advance of his retirement.

Sir Iain has held the vice-chairmanship of RBS since March 1994. But now that he has relinquished the role of full-time executive chairman of British Telecom, rather than carrying out the job on a part-time, non- executive basis he is keen to land the chairmanship of a large publicly quoted company in Scotland.

Sir Iain, 55, travels home to Scotland on most weekends and could combine the chairman's role at RBS with his present job at BT. Sir Iain has never publicly commented on the possibility of his taking over the chairmanship of RBS, but he known to be keen on the idea. "It is a live issue at the moment," said one source close to the bank.

Dr Mathewson, 58, could find himself in a difficult position if the succession is settled in Sir Iain's favour before his term as chief executive of RBS is complete.

Dr Mathewson and Viscount Younger are said to share the same strategic views for the bank. "You could not put a cigarette paper between them," said one observer. However, it is the view of some members of the board that it would be more appropriate to draw Viscount Younger's successor from among the non-executives.

Sir Iain has increasingly eased down his activities at British Telecom following the arrival of Sir Peter Bonfield as chief executive. Although BT has failed to pull off two big mergers - first with Cable & Wireless and then with MCI of the United States - it has concluded a $10bn (pounds 6bn) transatlantic tie-up with AT&T, of which Sir Peter is in charge.

RBS, which also owns the insurer Direct Line, is regarded as one of the success stories of the banking sector. However, earlier this year it failed to complete the takeover of the building society, Birmingham Midshires, after being outbid by Halifax.

Outlook, page 23

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