ROYAL Bank of Scotland and Barclays both finalised new rounds of job cuts yesterday, with nearly 4,000 posts to go between the two lenders.
RBS, which is 83 per cent state-owned, said it would cut 3,500 people from its investment bank through lay-offs or asset sales “in light of a changed market and regulatory environment”. It said that it would abandon all work in cash equities, broking, equity capital markets and M&A.
Credit Suisse analysts suggested that the bank’s intention to cut its wholesale funding needs by £75bn “would imply significant downsizing of the other businesses too” alongside those marked for disposal.
Industry sources said that the restructuring reduces the wholesale bank to little more than a service centre for corporate clients.
The bank also said it would cut 950 jobs in its troubled Irish branch, Ulster Bank, 350 of which will be in Northern Ireland. The decision brings RBS’s total cuts in 2011-2012 to 4.3 per cent of its global headcount – a big increase on the 1.3 per cent, or 2,000, posts that it had previously said would go.
The scaling back of its investment bank comes after chancellor George Osborne said in December that the bank should shrink its involvement in international wholesale activities.
Effectively, the bank did so last year, dropping out of Thomson Reuters top 10 league table for investment banks for the first time in over a decade.
Meanwhile, Barclays quietly informed 422 of its IT staff in the UK that their services are no longer required due to changes to its technology strategy.
It is understood that the bank is particularly keen on expanding its mobile banking capabilities in Africa, where it has a growing branch network. It views mobile payments systems as a big source of future competition.