A top banker’s gloomy outlook

by Jessica Shambora

The drama continues apace in banking. Yesterday we shared a CNN interview with Citigroup (C) CEO Vikram Pandit, as he struggles to hang on, while Pattie last Friday gave her take on the fall of Bank of America’s (BAC) chief risk officer, Amy Brinkley — a veteran of Fortune’s Most Powerful Women list.

Another top woman in banking — one of the few still standing — swung by our office here at Fortune a few days ago. Ellen Alemany is chairman and CEO of RBS Americas (RBS) and Citizens Financial Group, an RBS unit with $6 billion in revenues and branches in 12 states. Alemany, who joined UK-based Royal Bank of Scotland in June 2007, had just finished a run of 13 town halls with thousands of her employees across the U.S.

Though you may not know her name, Alemany is very much at the center of the banking world. She’s the only woman to head a top-10 U.S. commercial bank. And as the representative for the Boston district (and only woman) on the Federal Advisory Council, she regularly consults with Fed chair Ben Bernanke and the Board of Governors.

So what is Alemany’s outlook? “There will be more small bank failures in the next six to nine months,” she told us, noting that she’s concerned about declining real-estate values and rising unemployment. She sees the negative trends in her own backyard. Citizens’ headquarters are in Rhode Island, where the jobless rate is 11.1%. And the bank operates in Michigan, where the unemployment rate, 12.9%, is the highest in the U.S.

Recovery seems so far away that businesses aren’t even looking to expand. “We have money to lend, but the loan demand isn’t there,” Alemany says. “It’s going to be difficult for the remainder of this year through the first half of next year.”

As for her own career, Alemany has come to understand “difficult.” After 21 years at Citigroup, where she ran Global Transaction Services, a profitable $8 billion unit in some 100 countries, she moved to RBS. It might appear that she was seeing safer ground. But the British government has had to shore RBS and now owns 70% of the business. And if you think that Citi is the worst-performing bank stock, think again. RBS’s shares have sputtered 87% in the past 12 months. Citi is down a mere 83%.