RBS reveals plan to axe 3,500 jobs
Around 3,500 jobs will be cut at Royal Bank of Scotland over the next three years under plans to shrink its investment banking arm, the taxpayer-backed lender has said.
In a further blow for banking sector staff, RBS subsidiary Ulster Bank said it would cut 950 jobs in the Republic of Ireland and Northern Ireland, while Barclays revealed plans to axe more than 400 posts at its technology and infrastructure division.
The RBS job cuts at Global Banking and Markets (GBM), which has employees in Stoke, Manchester, Edinburgh and London, follows Government pressure for the 83% state-owned bank to pull back from its ambitions to be a global investment player.
Investors backed both banks, as shares in RBS surged more than 5% to near the top of the FTSE 100 Index, while Barclays gained nearly 2%.
But David Fleming, Unite national officer, said RBS's decision to reduce the headcount at GBM was "staggering". He said: "It is a disgrace that while on a daily basis stories are emerging about the massive bonuses at the top of the bank, increasing numbers of jobs are being cut from amongst the hard-working staff."
GBM, which employs 18,900 worldwide, deals with a range of financial services such as debt advice, equity trading and mergers and acquisitions. Its range of work with companies and governments spans from refinancing contracts for Anglian Water, Gatwick Airport and Tesco to debt issues for Finland.
The job losses come amid reports that John Hourican, the head of GBM who will continue to oversee the restructuring of the business, is in line to pick up £4 million in long-term incentive shares that he was awarded in 2009.
The latest round of job cuts come on top of 2,000 losses announced by the bank last summer. The new losses will mean nearly 11,000 posts have been cut at GBM from the pre-banking crisis headcount of 24,000.
RBS said the strategy was designed to help move toward the ring-fencing requirements outlined by the Independent Commission on Banking and adopted by the Government last year. The recommendation called for banks to ring-fence their retail, or high street, operations from their riskier investment banking divisions.
Meanwhile, the bank said it would restructure GBM and cash management division Global Transaction Services (GTS) by splitting the businesses into two new divisions - Markets and International Banking.