RBS to axe thousands of jobs in major overhaul

Taxpayer-backed lender expected to offload international business, scale back investment banking activies according to reports

Taxpayer-controlled Royal Bank of Scotland will next week declare that it is to shrink radically with the loss of thousands more jobs.

Including the sale of its US Citizens bank, which employs 18,500, and the separation of Williams & Glyn’s, which has 4500 staff, RBS could reduce its current headcount from 120,000 to fewer than 100,000, a level not seen since it took over NatWest in 2000.

RBS declined to comment on specific job numbers today but its chief executive Ross McEwan and chancellor George Osborne have made it clear they want the bank to shrink, particularly the investment bank, which employs 11,000 people.

At the bank’s third-quarter results in November, McEwan said: “I think over time the shareholders will see a much simpler bank that actually gives a better long-term return.

“We’ve got parts of this business that are not returning their return on equity — that’s actually greater than the return on the cost of our capital, and we need to start fixing those as our next phase of making this a much better bank.”

He emphasised the need to cut costs, saying: “A 65 per cent cost-to-income ratio for really what is turning into a retail-end corporate bank is too high. At this stage, our view is that it needs to be in the mid-50s; we’re doing the work for February, which will show what it should be, but my targeting is in that mid-50s.”

Some senior bankers suggest that McEwan is looking at merging RBS investment bank into its corporate banking division in much the way things run at Lloyds Banking Group.

McEwan said in a video posted on the company’s website this week: “My aspiration is not to run the world’s biggest bank. My aspiration is to run the best bank in the UK, nothing to do with size. A lot of our costs are old costs related to a big global group that we are not any more.”

“The new focus of RBS is unsurprising considering the comments from the Chancellor on the future focus of RBS,” said Berenberg banking analyst James Chappell. “The issue is that this will make 10 years of restructuring for RBS and create further uncertainty, in our view.”

RBS shares rose 6.1p to 361.8p.

Separately, Yorkshire and Clydesdale banks, owned by National Australia Bank, said they had been hit by higher-than-expected customer complaints over mis-selling payment protection insurance and interest-rate hedges.

The banks said: “regulators continue to take an active stance in our management of customer claims.”

This means NAB may have to up provisions in its half-year results to March.

Start your day with The Independent, sign up for daily news emails
Sport
tennisLive: Follow all the updates from Melbourne as Murray faces Czech Tomas Berdych in the semi-final
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
Arts and Entertainment
Taylor Swift is applying to trademark song lyrics from 1989
musicYou'll have to ask Taylor Swift first
PROMOTED VIDEO
News
Joel Grey, now 82, won several awards for his role in Cabaret
people
Sport
Harry Kane celebrates scoring the opening goal for Spurs
footballLive: All the latest transfer news as deadline day looms
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness