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RBS announces another 3,500 job cuts

RBS announces another 3,500 job cuts

Category: Banking

Updated: 14/12/2012
First Published: 12/01/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The majority public-owned Royal Bank of Scotland (RBS) has announced it is to cut 3,500 jobs from its investment banking arm.

The bank said that the move will begin immediately but could take up to three years to complete.

The job losses come on top of the 2,000 that RBS shed in the second half of 2011.

Job losses will be split between the UK and international offices, with almost 1,000 positions expected to be lost from Ulster Bank, RBS's Irish subsidiary.

RBS said the decision made up part of the bank's re-organisation and would allow it to focus on more profitable parts of the business.

It also revealed that it is considering selling or shutting down parts of its investment arm, such as departments dealing with mergers and acquisitions, corporate broking and cash equities.

The bank also said that the restructuring would help it fall into line with new rules about ring-fencing customers' funds from investment operations that have been recommended by the Independent Commission on Banking.

RBS's chief executive Stephen Hester said that the group's strategy which was outlined in 2009 has succeeded in setting the bank on the road to long-term success, but that it must also 'adjust to fresh challenges'.

"And it is clear that, particularly in the wholesale banking arena, significant new pressures have emerged," he added.

"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.

"Our goal from these changes is to be more focussed for customers, more conservatively funded, more efficient and with better, more stable returns for shareholders overall."

Since the bank was bailed out to the tune of more than £45 billion in 2008 it has cut thousands of jobs. And of the 30,000 roles that have been axed, 22,000 of them have come in the UK .

The latest round of cuts has been met with anger from the Unite union.

"Enough is enough," commented David Fleming, national officer for the union. "

It is a disgrace that while on a daily basis stories are emerging about the massive bonuses at the top of the bank, increasing numbers of jobs are being cut from amongst the hard working staff.

"RBS staff have faced endless speculation and uncertainty about their futures. It is time for the Royal Bank of Scotland Group to come clean about all its restructuring plans and be honest with the staff."

But the markets reacted well to the news, with the 82% state owned bank seeing its share price rise by 6.8% in this morning's trading.

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