Member Article

Royal Bank of Scotland to cut 3,500 jobs

The Royal Bank of Scotland has announced 3,500 job cuts in a major reorganisation of its investment bank.

This round of redundancies comes in addition to the 2,000 announced last year, and are spread across UK and overseas offices.

RBS’ wholesale business arm will be broken down into “Markets” and “International Business” following what the bank calls a “changed market and regulatory system.”

Going forward, the wholesale business will focus on fixed income, foreign exchange, debt financing, transactions services and risk management solutions.

The reorganisation will see an exit from cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses.

Group Chief Executive Stephen Hester said: “We launched the RBS recovery plan in 2009 with strategic tests for the businesses that the Group would retain.

“They would be restructured and managed to sustain strong, customer driven competitive positions, return more than their cost of capital, use a proportionate amount of Group resources and be closely connected with each other.

“We have reduced our balance sheet by some £600 billion and have rebuilt capital ratios that place us among our strongest international peers. Our core Retail and Commercial businesses outside Ireland now operate with an attractive return on equity overall.

“The changes we are announcing today seek to ensure that RBS is at the front of the pack in pursuing a strategy that reflects the environment we expect to operate in.

Unite National Officer, Rob MacGregor, said: “For RBS to announce the cut of 3,700 frontline bank staff from their high street branches across the UK is absolute madness.

“Essentially RBS has decided that front line costs should be cut, to fund the crisis caused by the City bankers.

“This move to reduce front line clerical branch staff by up to a third is short-sighted in the extreme, high street banks are busier then ever as customers increasingly seek a trusted friendly local service.

“The union is angry that this majority taxpayer owned bank has totally misjudged the public’s appetite for a return to traditional banking.

“RBS is clearly attempting to force customers to use automated services and the internet in order to do their banking, just to make short-term financial savings.

“The staff hit by this decision will be amongst the lowest paid within RBS, some of the longest serving and most loyal who have worked in the local branch network for many years.

“Real questions must be answered by management about how they expect to give customers the high quality, personalised service they currently enjoy from their local branch after they pull out staff in every community across the UK.”

This was posted in Bdaily's Members' News section by Tom Keighley .