RBS chief moves to reassure staff on job losses

Royal Bank of Scotland Group CEO Ross McEwan moved to reassure staff that there will be “no big announcement” on job cuts when the lender publishes the results of its strategic review next week.

“This type of thing is frustrating and unsettling,” Mr McEwan wrote in a memo to staff. “This has been building over recent weeks and months and was always to be expected ahead of our strategy update.”

Mr McEwan, who replaced Stephen Hester as CEO in October, will next week detail his plan to shrink RBS’s investment banking and overseas units to focus on consumer and commercial banking in Britain, a source said. The overhaul will lead to job losses over the coming years, the source added.

Britain’s largest state- owned lender will shrink by 30,000 as businesses including its US bank and some British branches are spun off and jobs are cut, the Financial Times reported yesterday. The bank will also pull out of dozens of the 38 countries in which it retains a presence, Sky News reported.

The government, which owns 80% of RBS, has been pushing the lender to focus on UK consumer and corporate banking as it tries to recoup some of the £45.5bn (€55bn) it spent bailing out the company five years ago. Mr Hester departed in June after the government pressed him to shrink the securities unit, and five months later, RBS set up an internal bad bank in an effort to speed up the cleaning up of its balance sheet.

RBS has gained only about 5%, and the stock is still trading below the price at which the government could sell its stake without incurring a loss. The treasury is preparing to sell a second stake in Lloyds in coming months.

The 30,000 jobs cited by the Financial Times included the 18,500 staff at RBS Citizens’ Financial Group, its US banking unit, which RBS plans to sell in an initial public offering this year. The newspaper said the figure also includes about 4,500 workers at Williams & Glyn, a group of 314 branches that RBS is selling as a condition of its state bailout.

A spokeswoman for the bank declined to comment on the report.

— Bloomberg


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