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
  • Get to the point
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

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before