RBS has raised job cuts total by 400, MPs told
Friday 20 March 2009
The deputy chief executive of Royal Bank of Scotland told MPs yesterday that the Government-controlled bank was set to cut 2,700 UK jobs, 400 more than RBS had previously announced.
The extra losses disclosed by Gordon Pell will be at RBS Wealth and RBS International. Mr Pell caused confusion with his comments to the House of Commons' Scottish Affairs Committee by saying that 260 jobs would go in Scotland, a figure that RBS was later forced to admit was not definite. Mr Pell, who was promoted in the wake of Sir Fred Goodwin's departure from the bank, said he believed the former RBS chief executive's reputation would partly be restored. Defending Sir Fred was "like Mission Impossible", Mr Pell said, but he claimed Sir Fred made a "huge contribution" to Scotland.
But he told the MPs that the uproar about Sir Fred's £16.6m pension was sapping staff morale. "I don't want them to have to spend the first three pages of every newspaper reading about Fred's pension and then what we're actually doing positively comes in on page four," Mr Pell said.
Mr Pell weighed into the debate about controls on mortgage lending, telling the MPs that 100 per cent home loans were "immoral" and amounted to putting "a loaded gun in the hands of someone who can't pay".
Despite its huge losses from investment banking, RBS's retail bank was run relatively prudently under Mr Pell and maintained a small share of the mortgage market.
After indicating earlier this year that it might consider limiting mortgage lending multiples, the FSA's chairman, Lord Turner, left the matter open in his regulatory review of banking published on Wednedsay.
Mr Pell admitted that RBS's takeover of ABN Amro was a mistake and said that up to 60 per cent of RBS's record £24bn loss last year was down to the deal. "The one distinguishing feature in the catalogue of shame, in which all bankers sit at the moment, is that while that was going on at a crucial moment in history and a crucial moment in terms of our capital position, we embarked on the acquisition of ABN Amro," he said.
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