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RBS in massive layoffs?

February 21, 2014

British media reports have said Royal Bank of Scotland will shortly announce a departure from many investment banking segments. They said the move would result in the loss of tens of thousands of jobs.

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Royal Bank of Scotland logo
Image: AP

The Financial Times and the Daily Telegraph reported Friday that Royal Bank of Scotland would soon announce job cuts of between 20,000 and 30,000. They assumed the lender - owned 80 percent by the taxpayer – would inform the public about its plans while presenting an earnings report next week.

The media reports suggested the layoffs would be a result of RBS plans to withdraw from many of its investment banking activities and much of its international business, particularly in Asia.

They added such a drastic reduction of the workforce would dovetail with the strategy of CEO Ross McEwan who had been seeking to revive the fortunes of the partly nationalized lender after being granted a 45-billion-pound ($75-billion, 54.7-billion-euro) government rescue in 2008.

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"My aspiration is not to run the world's biggest bank, but to run the best bank in the UK," McEwan said in a video message posted on the RBS website.

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In January, the bank was hit by past misdeeds charges of three billion pounds after already having posted annual losses since 2008.

The planned departure from investment banking segments was welcome by analysts. "Such a strategy is likely to result in a smaller, but more efficient and less risky bank," Shore Capital Stockbrokers economist Gary Greenwood said in a statement.

hg/hc (AP, Reuters)