RBS: The route into ETFs

The ETF business at RBS is still in its early stages but it is growing. Andrea Sozzi Sabatini and David Moroney talk to Clare Dickinson about the development of the business and how they plan to expand it

The development of RBS’ ETF business has been two-fold; it inherited the business from Dutch bank ABN Amro when it was taken over in 2008 but after that the focus fell on other parts of the business. This year it has approached the ETF business with renewed vigour and a firm plan to take it forward.

Andrea Sozzi Sabatini, head of sales for EMEA and LatAm structured retail at RBS has been involved in the European ETF business since its inception. When he was at Merrill Lynch in 2000, he was involved in what would become the first ETFs in Europe, the Merrill Lynch LDRS.

Even before that, Sabatini recognised the benefits that ETFs could offer investors: “When I was at the Italian exchange, I wanted to launch a segment for ETFs but at the time it was too early – it was 1998. I left before the segment was launched.”

He moved to London in 1999 to work at Schroder’s where he met David Moroney, who is now global head of retail structuring and structured funds at RBS.

Sabatini moved to ABN Amro in 2005 and in 2008 he became involved in the ETF business, which by that time was part of RBS. That was the same year that Moroney moved to RBS from Barclays Capital.

ABN Amro launched its first ETF in 2006, another nine followed in 2007 but after that the development of the business was put on hold until after the takeover. “At that time the bulk of our business at RBS (and it still is the bulk of our business) was with certificates and turbos and generally speaking retail products, not really ETFs. For a year-and-a-half to two years we concentrated our attention on the existing business to maintain our position in the major markets. ETFs were a good diversification of our business but we couldn’t push it at that time as we would have wanted.”



Relaunch
In 2010, RBS started launching new products again, with a focus on commodities, emerging markets and alternatives, where Moroney says the bank’s strengths lie. “In the analysis we did last year when we thought of how to scale out the business, it became obvious that some of things we were good at as a bank were very useful in the ETF world. We have a long standing track record of being pre-eminent in the commodities and emerging markets so it’s a natural fit for us to be a provider of ETFs in this market. “