Royal Bank of Scotland Group Plc, Britain’s biggest government-owned lender, cut as many as 300 staff in its capital markets and cash equities units after failing to find a buyer for the businesses.
Most of the employees affected by the decision are London-based, the bank said in a statement e-mailed to Bloomberg News today. The lender said in January it would cut about 3,500 jobs at the investment-banking division and sell or close the unprofitable cash equities, mergers advisory and equity capital markets divisions. Last month, the bank sold its Hoare Govett corporate broking unit to Jefferies Group Inc., transferring about 50 jobs. It has been unable to find buyers for the rest of the U.K. equities business.
Chief Executive Officer Stephen Hester, 51, decided to dispose of the units after volatile markets and increasing regulation rendered it difficult to generate returns that beat the cost of equity.
“Having to cut jobs is the most difficult part of our work to rebuild RBS,” the Edinburgh-based bank said in the statement. “After careful assessment of the various approaches made by interested parties, we have decided to start winding down parts of our EMEA Equity Capital Markets and cash equities businesses, and certain associated activities globally.”
The lender remains in active discussions with potential buyers for various other parts of the units including Asia and the Netherlands, it said in a statement.
Lazard Ltd., which is advising RBS on scaling back its securities unit, has been given until Feb. 23, when RBS reports year-end results, to find buyers for the remaining businesses.
The government owns 82 percent of RBS after injecting 45.5 billion pounds ($72 billion) of public money into the lender at the height of the financial crisis, making it the costliest bailout of any bank in the world.
Hester said this week that restructuring RBS was equivalent to defusing what he called “the biggest time bomb in history.” Hester waived his 2011 bonus after the U.K.’s opposition Labour Party said it would seek a Parliamentary vote on the payment.