Royal Bank of Scotland Group Plc, the U.K.’s biggest taxpayer-controlled lender, is eliminating 618 branch-based financial advisers as regulators force lenders to charge clients for the service.
RBS is also creating 351 financial-planning jobs as a result of the rule changes, the Edinburgh-based bank said in a statement today.
The Financial Services Authority’s Retail Distribution Review will from the end of 2012 prevent the payment of commissions to advisers, and lenders are preparing to charge for the service. HSBC Holdings Plc said in June last year it was cutting 700 employees offering face-to-face advice in branches while Barclays Plc, Britain’s second-largest bank, said in January last year it would cut 1,000 employees as a result of the regulations.
“These latest RBS job losses are brutal,” David Fleming, a Unite labor union national officer, said in a statement. “Unite, for some time, has had major concerns about the appalling manner in which these workers at the bank have been treated.”
RBS Chief Executive Officer Stephen Hester has shrunk assets by more than 700 billion pounds ($1.1 trillion) and cut about 36,000 jobs since he took over from Fred Goodwin in 2008 at the bank. RBS said in January it would cut about 3,500 jobs at its investment bank, citing volatile markets and the cost of new U.K. regulation.
“Having to cut jobs is the most difficult part of our work to rebuild RBS and repay taxpayers for their support,” RBS spokesman Michael Strachan said in the statement. “We will do all we can to support our staff, offer redeployment opportunities wherever possible, keeping compulsory redundancies to an absolute minimum.”
RBS gained 3.4 percent to 243.3 pence a share in London today. The bank trades at a level equivalent to less than half the price at which the taxpayer bought its 82 percent stake in the lender for about 45.5 billion pounds.