RBS 'to overhaul investment arm'
Sunday 16 October 2011
Taxpayer-backed Royal Bank of Scotland is reportedly preparing an overhaul of its investment banking arm which could put up to 5,000 jobs at risk.
RBS, which is 83% state-owned, has launched a review into its Global Banking and Markets decision amid falling revenues and mounting regulatory pressure, the Sunday Times said.
Draft proposals, which will be influenced by the final outcome of reforms including recommendations by the Independent Commission on Banking, would see European outposts cut out of the investment banking operation and focus placed on its British and US operations.
RBS earlier this year warned up to 2,000 jobs could go as it unveiled its exposure to Greek debt and provision to cover compensation for mis-sold payment protection insurance (PPI) tipped it to a half-year loss of £794 million.
However sources have told the Sunday Times that the latest plan would increase the number of jobs at risk significantly. RBS declined to comment.
Stock market turmoil and a lack of investment deals globally are hitting investment banks across the world.
Elsewhere, new capital rules, which require banks to hold larger cash buffers to protect against potential future crises, are making it harder for banks to generate the high returns investors demand.
Meanwhile, Wall Street banking giant Goldman Sachs will unveil a dismal set of third-quarter results on Tuesday, underlining the pressures the market turbulence has had on the sector.
JP Morgan Chase has already reported a 4% decline in profits, citing the recent volatility and eurozone debt crisis as the reason behind its drop in business.
The picture is much the same at Goldman Sachs, which has already announced thousands of job cuts and where revenues are expected to have fallen by about half (54%) to 4.93 billion US dollars (£3.1 billion) compared to the second quarter.
The impact of the ugly results is likely to trigger a slashing of bankers' bonuses, according to analysts, after the bank made a commitment to ensure no more than between 35% and 45% of revenue is paid to staff - a lower proportion than any other Wall Street bank.
Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'
Emergency call 'started off dumb, but got pretty serious'
Greatest mystery about the hit BBC1 show is how it continues to be made at all, writes Grace Dent
"History is violent," says the US Army tank commander Don "Wardaddy" Collier
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Axe wielding man shot dead after attacking four New York policemen on busy street
- 3 Watch what happened when food critics were unknowingly served McDonald's
- 4 Jimmy Carr's Oscar Pistorius joke goes a bit too far at the Q Awards
- 5 Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo
Renee Zellweger on plastic surgery rumours: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
This 'woman calls police to order pizza' story isn't going where you're expecting
FCKH8: YouTube reinstates provocative anti-sexism video showing young girls swearing
Axe wielding man shot dead after attacking four New York policemen on busy street
Diwali: What is the festival of lights – and how is it celebrated around the world?
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...