Royal Bank of Scotland Cuts 272 Jobs at U.K. Corporate Bank
Royal Bank of Scotland Cuts 272 Jobs at U.K. Corporate Bank
Simon Dawson/Bloomberg
Tomorrow RBS will announce a plan resulting in the loss of as many as 5,000 investment banking jobs, according to two people familiar with the matter.
Tomorrow RBS will announce a plan resulting in the loss of as many as 5,000 investment banking jobs, according to two people familiar with the matter. Photographer: Simon Dawson/Bloomberg
Royal Bank of Scotland Group Plc, Britain’s biggest government-owned lender, will cut 272 jobs from its U.K. corporate banking unit as slowing growth and rising volatility force Chief Executive Officer Stephen Hester to shrink the lender.
Employees are being informed of the reductions today, an RBS spokesman said in an interview. The cuts will be made across the U.K. and will include reductions in sales staff, managers and support personnel. RBS’s corporate unit, which lends to businesses, employs about 13,500 people which means the cuts represent about 2 percent of the total.
When the bank reported operating profit down 63 percent to 267 million pounds ($410 million) in the third quarter, Hester, 51, warned of difficult conditions brought on by lower economic growth and continuing market volatility. The bank has cut more than 30,000 jobs since its government bailout in 2008 and 2009. Edinburgh-based RBS will make an announcement about further reductions at the investment banking unit tomorrow, people familiar with the matter said this week, which may result in as many as 5,000 additional reductions.
The bank’s Irish unit, Ulster Bank, is meanwhile preparing its second round of job cuts in four years as part of an effort to save about 50 million euros ($63.9 million), according to two people with knowledge of the plan today.
“Having to cut jobs is a difficult part of our work to rebuild RBS, repay taxpayer support, and challenging market conditions require us to make efficiencies to deliver greater value to customers and shareholders” said spokesman Nigel Owen.
‘Shrink Further’
The bank will try to employ the workers elsewhere, but forced redundancies can’t be ruled out, he said.
“The investment bank, in common with many other investment banks, will have to shrink further in order to be sustainable,” Hester said in November. “With income very hard to grow we do need to go back and take a very close look at the costs base. We are doing that, and unfortunately that will affect jobs.” He declined to give an estimate for the number of reductions.
Last month, Chancellor of the Exchequer George Osborne said the investment bank needed to shed riskier activities.
To contact the reporters on this story: Howard Mustoe in London at hmustoe@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net
To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net; James Hertling at jhertling@bloomberg.net
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