Tags: royal bank of scotland | rbs | jobs | investment

RBS Investment Bank Said to Cut Up to 14,000 Jobs in Revamp

Wednesday, 04 Mar 2015 08:39 AM


Royal Bank of Scotland Group Plc may cut more than two thirds of its investment-bank jobs as part of a plan to shrink the securities unit and focus on the U.K. consumer market, a person with knowledge of the matter said.

Under an overhaul, announced last week, RBS may eliminate as many as 14,000 jobs at the investment bank, said the person who asked not to be named because the details are private.

The Edinburgh-based firm’s corporate and institutional bank, housing most of the securities activities, employs 16,000 to 18,000 people, out of a workforce of more than 108,000. RBS hasn’t finalized the plans on job cuts, the person said.

Chief Executive Officer Ross McEwan, 57, on Feb. 26 forecast “significant” job cuts at the investment bank as the government-owned lender posted its seventh straight full-year loss. As part of his restructuring program, the CEO plans to cut the number of countries in which the securities unit operates by two-thirds and shrink U.S. operations.

“The retreat by RBS in investment banking has been going on for a number of years — this is really just the next phase,” Sandy Chen, an analyst at Cenkos Securities Plc in London, told Bloomberg Television’s Francine Lacqua and Guy Johnson on Wednesday. It’s driven “by increased capital and regulatory requirements to pull back from investment banking activities in general,” he added.

The Financial Times reported the 14,000 job cuts earlier.

U.S. Unit

The bank’s shares were little changed at 370 pence at 11:25 a.m. in London, and are down about 6 percent this year.

RBS plans to cut risk-weighted assets at the investment bank from 107 billion pounds to about 35 billion pounds to 40 billion pounds in 2019.

The CIB division, headed by Rory Cullinan, posted an operating loss of 643 million pounds in the fourth quarter compared with a loss of 557 million pounds in the previous three months. Income in the corporate and institutional bank will probably fall “substantially faster” than costs as part of the overhaul, RBS said in a statement last week.

At the U.S. trading division, the bank plans to eliminate more than 1,000 jobs, Chief Financial Officer Ewen Stevenson said. The unit employs about 2,000 people, with most of the operations in Stamford, Connecticut, he told reporters.

RBS, the U.K.’s largest government-owned lender, plans to focus on clients in its home market and western Europe, with support from trading hubs in Britain, the U.S. and Singapore. It will keep some back office operations in Poland and India, as well as a sales team in Japan, it said last week.

As part of the restructuring, code-named Project Brown, RBS plans to keep coverage teams in the Netherlands, Germany, France, Italy, Spain, Sweden, Denmark, Finland and Norway, a person familiar with the matter said last month. The lender plans to sell or wind down its businesses in markets including China, Hong Kong, Indonesia, Malaysia, South Korea, India and Thailand, the person added.

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Royal Bank of Scotland Group Plc may cut more than two thirds of its investment-bank jobs as part of a plan to shrink the securities unit and focus on the U.K. consumer market, a person with knowledge of the matter said.
royal bank of scotland, rbs, jobs, investment
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2015-39-04
Wednesday, 04 Mar 2015 08:39 AM
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