Thousands of jobs to go at RBS
(11 January 2011 – Australia) Thousands of jobs will be lost at the Royal Bank of Scotland (RBS) this week – up to 5000 of the 18,900 employees in the investment banking division will be cut.
Britain’s biggest government-owned lender is now reversing a decade of expansion that included US$140 billion (A$137 billion) of acquisitions.
Chief executive Stephen Hester has decided to make the announcement earlier than planned, because uncertainty in the ranks about jobs was undermining productivity, according to a senior executive who declined to be identified because he wasn't authorised to speak publicly.
The Edinburgh-based lender plans to close its equities and corporate finance units globally, cutting as many as 5000 jobs, said two people familiar with the situation. The cash equities, equity research, corporate broking as well as mergers and acquisitions units may also be shut, the people said.
A spokeswoman for RBS in Australia confirmed that some of the 600 staff in the country may be affected, although no announcement has been made.
'RBS confirmed in November that we would adjust the size of our investment bank in line with changing market conditions,' she said.
'We will give an update on final decisions following consultation with our major shareholders,' she added, declining to specify a time for the update.
RBS is 83 percent owned by the British government after it had to be bailed out with £46 billion of taxpayer cash during the financial crisis, and UK finance minister George Osborne last month said the bank needed to shrink its global banking and markets division (GBM) further to become less risky, even after effectively halving in size in the last three years.
British banks have also been told to separate their UK retail banking operations to reduce the risk that taxpayers will need to bail out the industry again, which is likely to make it most costly to fund big investment banking operations such as GBM.
Chief executive Stephen Hester has decided to make the announcement earlier than planned, because uncertainty in the ranks about jobs was undermining productivity, according to a senior executive who declined to be identified because he wasn't authorised to speak publicly.
The Edinburgh-based lender plans to close its equities and corporate finance units globally, cutting as many as 5000 jobs, said two people familiar with the situation. The cash equities, equity research, corporate broking as well as mergers and acquisitions units may also be shut, the people said.
A spokeswoman for RBS in Australia confirmed that some of the 600 staff in the country may be affected, although no announcement has been made.
'RBS confirmed in November that we would adjust the size of our investment bank in line with changing market conditions,' she said.
'We will give an update on final decisions following consultation with our major shareholders,' she added, declining to specify a time for the update.
RBS is 83 percent owned by the British government after it had to be bailed out with £46 billion of taxpayer cash during the financial crisis, and UK finance minister George Osborne last month said the bank needed to shrink its global banking and markets division (GBM) further to become less risky, even after effectively halving in size in the last three years.
British banks have also been told to separate their UK retail banking operations to reduce the risk that taxpayers will need to bail out the industry again, which is likely to make it most costly to fund big investment banking operations such as GBM.
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