RBS's headcount to rise in downturn

Royal Bank of Scotland, the UK's second-largest bank by market value, is to recruit 6,000 staff over the coming year in a move that will see the firm's headcount rise by almost 5 per cent.

Hirings will be made across the bank's entire UK operations, RBS said. The figure does not include recruitment in the US, where it recently acquired the retail operations of Mellon Financial in a £1.4bn deal. RBS has 85,000 employees.

The company said it aims to improve customer service both at the branch level and in its telephone banking operations, although it also expected to recruit a significant number of new back office personnel.

It is also keen to boost its presence in small business banking, a market which has recently seen the arrival of a new contender in the form of HBOS, made up of the newly merged Halifax and Bank of Scotland. RBS already has the largest single share of the small business banking market.

"Not all customers like being greeted by a touchtone menu when they call a bank. They would rather talk to a human voice," said a spokesman. He declined to say how much the latest plan would cost.

RBS, whose chief executive is Fred Goodwin, said it still expected the integration of National Westminster Bank to result in a further 2,000 job cuts. Total job losses resulting from the acquisition are expected to be 18,000.

RBS indicated last month that the NatWest deal would yield higher cost savings than previously anticipated, without giving specifics.