David Mowat Comments on Sobering State of UK Banking
David Mowat Comments on Recent Job Cuts in UK Banking Sector
WARRINGTON, UNITED KINGDOM -- (Marketwired) -- 06/17/13 -- Amid a
dearth of revenue, Britain's leading banks are gearing up for a
massive round of layoffs and employment cutbacks -- a move that David
Mowat says will have seismic effects, not just in the banking
industry but throughout the UK. To validate his assertion, Mowat
points to a recent article from Bloomberg, which notes that, by the
end of this year, the four largest banks in Britain are planning to
eliminate as many as 189,000 jobs. This will bring employment to a
nine-year low, and further cuts may come next year. Mowat has
responded to the Bloomberg article with a new statement to the press.
In his press statement, David Mowat -- MP from Warrington South --
comments on the important role of these banking jobs. "The UK
financial services employs over a million people," he notes. "As we
rebalance our economy it is important that this industry does not
lose its worldwide leadership position."
Despite Mowat's words, the current state of the UK's banking sector
appears grim. According to the article in Bloomberg, Royal Bank of
Scotland Group Plc, HSBC Holdings Plc, Lloyds Banking Group Plc, and
Barclays Plc will likely employ somewhere around 606,000 employees by
the end of 2013. This marks the lowest employment level since 2004,
and a 24 percent drop from its peak in 2008.
"The industry is under pressure from investors to reduce fixed costs
as Europe's sovereign debt crisis crimps income from investment
banking as loans sour in the region," Bloomberg notes. The four major
British banking firms posted 108 billion pounds of revenue in 2012, a
13 percent loss from its revenues in 2008. Costs, as a portion of
revenue, increased over this same stretch of time.
The total employee costs of these banks -- which include salaries,
bonuses, and pensions -- totaled 37 billion pounds in 2012. Though
this marks a slight drop from the past few years, it compares
unfavorably with the 25 billion pounds spent in 2004.
Ishmail Erturk, who lectures on banking at the Manchester Business
School, is quoted in Bloomberg as saying that "The reduction in
workforce is driven by three things: economic decline, investment
banking not producing as much income as it did and banks reducing the
wage bill to hit profit targets promised to shareholders."
The Bloomberg article also notes that automation and online banking
continue to lead to employee cuts in Britain's major banks.
As an elected official representing the Warrington area, David Mowat
has long expressed concerns over unemployment levels in Britain, and
is devoted to bringing more job opportunities to the area he serves.
Previously Global Managing Partner for Energy with consultancy
Accenture David Mowat was elected to the UK Parliament in May 2010.
His interests include banking reform, energy and climate policy, and
the regional economies. Since September 2012 he has been
Parliamentary Private Secretary to Greg Clark the Financial Secretary
to the Treasury.
PR Management Inc.
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