retrench in investment banking, cut 30,000 jobs: FT
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[February 21, 2014]
(Reuters) — Royal Bank of Scotland <RBS.L> is expected to announce
its withdrawal from many investment banking activities as well as
much of its international business in a move that is expected to
reduce staff numbers by at least 30,000 over the next three to five
years, the Financial Times reported on Thursday.
The newspaper said that the restructuring will be a part of a range
of cost-cutting measures and disposals adopted by Ross McEwan, the
bank's new chief executive who is looking to revive the fortunes of
the partly nationalized lender which was the subject of a 45 billion
pound ($75 billion) government rescue in 2008. (http://link.reuters.com/hyq96v)
RBS, which is 82 percent owned by the British government, declined
to comment on the story.
People familiar with the plans told the financial daily that the
bank is expected to refocus on three groups that include retail
customers, small businesses and larger companies.
"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," McEwan said in a video posted on the RBS website
earlier this week.
The FT said that the chief executive of corporate banking Chris
Sullivan could move to a different role or step down.
The bank is also expected to appoint a new head of the small and
medium enterprise division, the FT reported.
RBS on Wednesday said it had disposed off its structured retail
investor products and equity derivatives businesses to France's BNP
Paribas <BNPP.PA> to downsize its investment banking operations.
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In January, the bank was hit by past misdeeds charges of 3 billion
pounds, which is expected to leave it with a 7 billion to 8 billion
pound loss for 2013, marking RBS's sixth successive loss-making year
RBS has been looking at strengthening its capital position, which
has been under strain, through the sale of its U.S.-based Citizens
banking business, which accounts for about 14 percent of the group,
and an accelerated run-down of loans under a "bad bank".
(Reporting by Aashika Jain in Bangalore;
editing by Eric Walsh)
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