- John Davison will be CEO of KKR's Pillarstone bank division
- European banks have $2.1 trillion of underperforming assets
KKR & Co., the private-equity firm founded by billionaires Henry Kravis and George Roberts, hired former Royal Bank of Scotland Group Plc executive John Davison to advise banks on managing unwanted assets.
Davison, a former head of RBS’s strategic investment group, will become Chief Executive Officer of Pillarstone, a European unit of KKR, which supports banks including UniCredit SpA and Intesa Sanpaolo SpA in managing their non-core and underperforming assets, KKR said in a statement on Monday.
European banks are cutting unwanted assets to boost profitability and capital as regulators force them to build buffers to protect against losses in the event of a downturn. The lenders have about 1.9 trillion euros ($2.1 trillion) of unwanted or underperforming assets on their balance sheets, according to New York-based KKR.
“The U.K. was ahead of the curve in Europe in addressing the issue of non-performing loans, and John’s expertise played a big part in that,” Johannes Huth, head of KKR Europe, Africa and Middle East, said in the statement. “The combination of his unique business acumen and our ability to provide fresh long-term capital allows Pillarstone to offer a timely solution to banks across Europe.”
Barclays Plc, Britain’s second-largest bank by assets, sold its banking operations in Portugal for about 100 million euros to Bankinter SA last week as part of Chairman John McFarlane’s plan to boost capital and returns. RBS, the recipient of the U.K.’s biggest banking bailout, is selling and winding down some of its investment bank to reduce risk-weighted assets to about 30 billion pounds ($45.6 billion) by 2019 from 88 billion pounds in June.
At RBS, Davison was responsible for managing and selling property, shipping loans and companies, including the Jurys Inn hotel chain and suitcase maker Samsonite International SA. He will become a co-investor in Pillarstone.