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Huge job cuts expected at RBS

Friday, February 21, 2014 - 01:51

Feb. 21 - The Royal Bank of Scotland is continuing its revamp and is expected to cut more jobs when it announces its full-year results next week. As Hayley Platt reports, sources say headcount could be cut by almost a quarter as painful cost-cutting continues at the part-nationalised lender.

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Five years after it was part-nationalised and Britain's Royal Bank of Scotland is still having to make painful decisions. The bank is expected to axe 30,000 jobs over the next three to five years, according to sources. That's around a quarter of its workforce. RBS was, at one stage, the world's biggest bank. But CEO Ross McEwan has previously said that's not what he wants. SOUNDBITE: Ross McEwan, CEO, Royal Bank of Scotland, saying (English): "My aspiration is to run the best bank in the UK, nothing to do with size, just the best one." The job cuts include 22,800 which have already been announced. Most of those are in the U.S., and some in the UK. The additional 6,000 are expected to come from its investment banking arm. That would make RBS more like its state-backed rival, Lloyds Banking Group, says Richard Hunter from Hargreaves Lansdown. SOUNDBITE: Richard Hunter, Head of Equities, Hargreaves Lansdown, saying (English): "It's rather becoming much more like a Lloyds story, more streamlined, much simpler and almost as various U.S. banks are beginning to be described almost a utility." RBS is still 81 percent state-owned. It's under pressure from UK politicians to shrink its investment banking operations and focus on lending to British customers. The government's expected to sell its stake in Lloyds in the next year, whereas RBS' return to private ownership is seen as being 3 to 5 years away. George Hay is from Reuters BreakingViews. SOUNDBITE: George Hay, Financial Editor, Reuters BreakingViews, saying (English): "Investment bank or no investment bank the other big problem RBS has had is it just hasn't had enough capital. It's spent the last five or six years shrinking itself to become more healthy. Whatever happens it should be able to support the UK economy better and that's pretty much the fundamental thing." CEO McEwan will unveil the results of a strategic review of the business along with the bank's full-year results next week.

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Huge job cuts expected at RBS

Friday, February 21, 2014 - 01:51