Thousands of jobs to go at RBS
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Royal Bank of Scotland Group (RBS) has announced 3,500 jobs will be cut from its global banking and markets business as part of changes to the wholesale and investment banking business.
The changes follow a review announced in the firm’s third quarter results last year and will see the wholesale business reorganised into “markets” and “international banking”, as well as the exit and downsizing of some existing activities.
The bank says it ‘envisages’ net employment reduction of around 3,500 over the next three years, in addition to 2,000 job cuts already announced.
The bank will exit cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses. The overhaul will also result in significant reductions in balance sheet, funding requirements and cost base.
Stephen Hester, group chief executive at RBS, says the bank’s restructuring strategy had to “adjust to fresh challenges” and warns of “significant new pressures in the wholesale banking area”.
He adds: “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.
“Our goal from these changes is to be more focused for customers, more conservatively funded, more efficient and with better, more stable returns for shareholders overall.”
The bank says it could sell or close its “unprofitable” cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses which had income of around £220m in the nine months to September 2011. It has entetered into discussions with a number of potential buyers.
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