Royal Bank of Scotland Group Plc, Britain’s biggest government-owned bank, will cut 3,500 jobs at its investment bank over the next three years as it exits its unprofitable cash equities and mergers advisory operations.
RBS (RBS) will sell or close the units, along with its corporate broking and equity capital markets operations, it said today in a statement. The lender said it’s in talks with “a number” of buyers for the operation. The bank also said it cut a further 2,000 in the second half of last year.
“The changes we are announcing today seek to ensure that RBS is at the front of the pack in pursuing a strategy that reflects the environment we expect to operate in,” Chief Executive Officer Stephen Hester, 51, said in the statement. “Our goal from these changes is to be more focused for customers, more conservatively funded, more efficient and with better, more stable returns for shareholders overall.”
Hester is reversing a decade of expansion led by former CEO Fred Goodwin up to 2008 that included $140 billion of acquisitions. Hester is extending cuts he made when he reviewed the bank’s operations in 2009 after he took over. He has already retreated from some markets in Asia, running off loans and selling units including the European division of commodities- trading business RBS Sempra, which JPMorgan Chase & Co. bought for $1.7 billion. At the same time he expanded the bank’s equities and advisory business on the continent.
Equities Units Closing
Europe’s sovereign debt crisis has forced securities firms to scale back or close divisions that trade equities in Europe. UniCredit SpA, Italy’s largest bank shut its European equities unit in November, joining a growing list of companies including Nomura Holdings Inc. that have eliminated jobs in the region.
“RBS staff have faced endless speculation and uncertainty about their futures,” said David Fleming, National Officer of the Unite labor union. “Enough is enough.”
The lender aims to reduce the size of the investment bank’s balance sheet over the next three years to 300 billion pounds ($460 billion) from 420 billion pounds today, RBS said in the statement. The reductions will also reduce risk-weighted assets to less than 150 billion pounds. At the end of the three-year process, the investment bank will have declined to about 13,500 employees from about 19,000 at the end of September.
RBS (RBS) will sell or close the units, along with its corporate broking and equity capital markets operations, it said today in a statement. The lender said it’s in talks with “a number” of buyers for the operation. The bank also said it cut a further 2,000 in the second half of last year.
“The changes we are announcing today seek to ensure that RBS is at the front of the pack in pursuing a strategy that reflects the environment we expect to operate in,” Chief Executive Officer Stephen Hester, 51, said in the statement. “Our goal from these changes is to be more focused for customers, more conservatively funded, more efficient and with better, more stable returns for shareholders overall.”
Hester is reversing a decade of expansion led by former CEO Fred Goodwin up to 2008 that included $140 billion of acquisitions. Hester is extending cuts he made when he reviewed the bank’s operations in 2009 after he took over. He has already retreated from some markets in Asia, running off loans and selling units including the European division of commodities- trading business RBS Sempra, which JPMorgan Chase & Co. bought for $1.7 billion. At the same time he expanded the bank’s equities and advisory business on the continent.
Equities Units Closing
Europe’s sovereign debt crisis has forced securities firms to scale back or close divisions that trade equities in Europe. UniCredit SpA, Italy’s largest bank shut its European equities unit in November, joining a growing list of companies including Nomura Holdings Inc. that have eliminated jobs in the region.
“RBS staff have faced endless speculation and uncertainty about their futures,” said David Fleming, National Officer of the Unite labor union. “Enough is enough.”
The lender aims to reduce the size of the investment bank’s balance sheet over the next three years to 300 billion pounds ($460 billion) from 420 billion pounds today, RBS said in the statement. The reductions will also reduce risk-weighted assets to less than 150 billion pounds. At the end of the three-year process, the investment bank will have declined to about 13,500 employees from about 19,000 at the end of September.
