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RBS chief wants 'to run best not biggest bank', plans to cut 30,000 jobs

Published time: February 21, 2014 13:10
Reuters/Suzanne Plunkett

Reuters/Suzanne Plunkett

​The Royal Bank of Scotland (RBS) is expected to axe at least 30,000 jobs, mostly by offloading parts of its international business, and withdrawing from risky investment banking. The cost-cutting measures come as part of a massive restructuring plan.

RBS is 81 percent owned by the UK government, and has already cut 40,000 jobs since it was bailed out by in 2008. The Bank has 120,000 staff and is expected to refocus on three key groups: retail customers, small businesses, and larger corporations, the Financial Times (FT) reports.

The announcement of the 30,000 staff cut is expected early next week.

The restructuring comes after the new chief executive Ross McEwan came in aiming to decrease the RBS group headcount by a quarter over the next 3-5 years.

My aspiration is not to run the world’s biggest bank. My aspiration is to run the best bank in the UK – nothing to do with size. A lot of our costs are old costs related to a big global group that we are not anymore,” the chief executive said.

While retreating from the US and Asian markets RBS will perform a spring clean in its two subsidiaries Nat West and Ulster Bank, cutting 11,000 jobs from the investment division.

Williams and Glyn's bank will be separated from the RBS group next year, freeing another 4,500 from the headcount.

The fate of American based subsidiary Citizens Bank is more drastic, as RBS will sell its complete retail operation with 18,500 employees. The deal will stimulate its battered capital position, which now is one of the poorest in Europe.

RBS’s Tier 1 capital ratio, one of the main financial strength indicators, fell to between 8.1 and 8.4 percent at the end of 2013. The reduction induced pressure from City regulator to strengthen its balance sheet and affected Moody’s rating who issued a warning about a feasible downgrade of its credit position.

The bank has already reported a significant loss for 2013, with analysts expecting a pre-tax loss for last year of $11.6 billion (£7bn) - $13.3 billion (£8bn). It comes after $7.5 billion (£4.5bn) of impairments in the fourth quarter 2013 and the bank expects further litigation expenses related to US mortgage securities and mis-selling of payment protection insurance in the UK.

Royal Bank of Scotland was founded in Edinburgh in 1727, and was one of the world’s largest banks before the 2008 crisis. In 2012 it ranked 14 in the list of largest banks in the world by assets.

Comments (3)

 

victimofcorruption y 22.02.2014 05:08

Maybe they do it to manipulate our government into giving them more money or to avoid budget cuts. I dread to think though if a depressed person phoned the samaritans and their calls were on automatic divert to gchq how they be treated and that person losing all hope that therewas any good left in the world if a samaritan counselor could be so cruel. They would plummeted to the depth of despair. Best bet is to record the conversation although the volume might get turned down on your loud speaker so you have no choice but to pick up the handset. This is to cover their sorry corrupt arses.

 

victimofcorruption y 22.02.2014 04:52

If our a/c are operated by gchq then that explains why people i get through to treat me with animosity eg when i phone an organisation for legal advice and they are theyre hostile. Sometimes i get a person on the phone asking which company im trying to contact.does the number we dial flash up the company at gchq? Well sometimes it fails if they have to ask. Other times i will ring a number for one company and they answer with another company's name. If it is gchq then they too corrupt to be given so much power. Always trying to set up innocent people to make it look like the whole nation is doing something wrong

 

victimofcorruption y 22.02.2014 04:37

Perhaps theyre failing because theyve let gchq take over some many of their customer's accounts. Once when i contacted Sky to complain, some of their customer service officers caused me distress by bragging that they know how many laptops we have and that our computer belonged to my brother etc, the Sky manager (in India) said that mySky a/c is not operated bySky itself. It was an 'outside agency'pretending to be sky and the same goes with other companies/organisati ons i have anything to do with. I wondered which agncy he was talking about and i did not know about gchq until the snowden revealation.

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