Thousands more jobs are to be axed at Royal Bank of Scotland, which is 80 per cent owned by the taxpayer, after it announced the virtual dismantling of swathes of the bank created by disgraced former chief executive Fred Goodwin through the ill-fated takeover of ABN Amro.
RBS chief executive Ross McEwan also said for the first time that the bank, which has announced its seventh consecutive year of losses, could be in a position to pay its first dividend again in 2016.
McEwan said the bank will end investment banking activities in 25 countries this year. He said those business would never be profitable enough and tied up too much valuable capital. RBS had investment banking businesses in 59 countries in 2009, 38 countries at the end of 2014 and will have just 13 by the end of this year.
The division employs around 16,000 people across the globe with the majority of them in back office support functions.
McEwan was not specific about how many would go but said it would be "unfortunately substantial numbers".
RBS said it lost £3.5 billion last year, down from losses of £9 billion in 2013. Large parts of the loss were made up of one-off charges including £4 billion for the sell-off off of US business Citizens and £2.2 billion for fines and consumer pay-outs on such things as PPI mis-selling.
McEwan, who has given up £1 million of his share-based performance allowance for 2014, stressed that the core businesses of UK, Ireland and Western European retail and corporate banking were strong.
At the operating level RBS made a profit of £3.5 billion against losses of £7.5 billion in 2013.
On the dividend McEwan said: "By the time we get to 2016 we will have met the preconditions for paying a dividend and start having the discussion with the Prudential Regulation Authority."
RBS also confirmed that Sir Howard Davies will take over from Sir Philip Hampton as chairman. McEwan said: "I've met Sir Howard and I think he will do a great job."
The bank also announced the sale of a portfolio of $36.5 billion of US and Canadian loans to Japan’s Mizuho generating a loss of £200 million.
That cuts its risk-weighted assets in the investment bank by some £5 billion out of the £25 billion it has targeted for his year and £60 billion by 2019.Reuse content