Royal Bank of Scotland eyes plans to cut costs at private bank Coutts

Royal Bank of Scotland Group, Britain’s largest taxpayer-owned lender, will prioritise cost cutting at its Coutts private bank in the UK in the first half of 2016.

Alongside cost reductions at the investment bank and its Ulster Bank division, CEO Ross McEwan wants to lower expenses at the British private bank, according to a source, who asked not to be identified because the matter is confidential.

The unit had a 90% cost-to-income ratio excluding restructuring, litigation, and conduct issues in the third quarter, which management considers unacceptable, the person added.

Spokespeople for Ulster Bank, which employs 5,000 people in the Republic and the North, and at the IBOA bank staff union, separately said they did not expect the renewed cost-cutting focus to hit Ulster Bank. “Ulster has completed its cost-cutting programme,” said a spokeswoman for the bank.

RBS agreed to sell the international business of Coutts to Switzerland’s Union Bancaire Privee in March as the Edinburgh-based lender retreats from global operations to focus on consumer and commercial banking in the UK and Ireland.

It kept the British part of the private bank, which includes Queen Elizabeth II among clients.

“Following the sale of our international business we are now focused on streamlining our processes and propositions to improve efficiency and ensure our business better meets the needs of our clients,” RBS said yesterday.

“The revenue outlook remains bleak, therefore the key focus will be costs and how quickly it can fall out,” said Ian Gordon, an analyst at Investec in London with a buy rating on RBS shares.

Bloomberg and Irish Examiner staff

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