Media Reports Speculate On RBS Job Cuts Ahead Of 2013 Results

Tom Burroughes

24 February 2014

Media reports claiming that , the private bank, is planning to announce further deep cuts to international and investment banking jobs take insufficient account of large-scale changes already announced, this publication understands.

A report by Reuters on Friday, citing unnamed sources, said the bank could cut as much as a quarter of its international workforce of 120,000 people. A report in the Financial Times gave a figure of 30,000 cuts. RBS is due to issue fourth-quarter and full-year figures on Thursday, 27 February. The bank declined to comment on the matter when contacted by this publication, saying it cannot do so shortly ahead of a results announcement.
The Reuters report said the 30,000 staff cut figure includes previously announced plans to sell its US retail business Citizens, which accounts for 18,300 jobs, and a UK retail business, Williams & Glyn, which employs 4,500. This publication understands, meanwhile, that the already-announced reductions account for the bulk of any cuts taking place.
As is perhaps inevitable in the run-up to results, rumours about RBS’ strategy have been circulating, particularly as it is understood that the UK government wants the bank to improve profitability and shed certain units ahead of any sale of the taxpayer’s stake in the bank. (The government owns more than 80 per cent of RBS). The bank was rescued in 2008 amid heavy losses sustained in the credit crunch. One factor behind its woes was the high-risk M&A strategy to buy part of ABN AMRO - by then-chief executive Fred Goodwin. He subsequently resigned and was pilloried in the media as an example of the kind of hard-charging CEO who had got banks into trouble.

Ever since the 2008 crisis and government bailout, there has also been speculation that Coutts, part of the wealth segment of RBS, could be sold. During the past five years, however, there has been no clear indication from the bank about such a move, and it hasn’t commented when contacted about it.