New Haven Register (Sunday) (New Haven, CT)
Uncertainty hangs over RBS’s Stamford operations
STAMFORD — Royal Bank of Scotland has committed to staying in the city for the next decade. Whether that pledge will reverse its long-dwindling headcount is much more uncertain.
The bank paired the June sale of its downtown base at 600 Washington Blvd. with a 12year lease signing at the same address — a move that dispelled worries that it would leave the city after laying off several hundred employees in the previous three years. But the bank has made no commitments to reversing the layoffs, and the United Kingdom’s looming exit from the European Union complicates the Edinburgh, Scotlandbased company’s longterm plans.
“For a British bank, everything is in the shadow of Brexit and what Brexit could do to the British economy,” said Lawrence J. White, an economics professor at New York University. “They may be feeling more cautious in the shadow of Brexit.”
The company did not respond to requests for comment for this article.
United Kingdom Prime Minister Boris Johnson has set an Oct. 31 deadline for the country to leave the EU. If the British government does not reach an agreement with EU officials by then on the terms of its departure, it would crash out with a “nodeal Brexit.”
A newly released British government planning document outlined a number of stark scenarios that could arise in that situation. Among the worstcase assumptions, “some crossborder UK financial services will be disrupted,” the document said.
Still, the extent to which a nodeal outcome could affect the oversight of RBS by the British government, which still owns 62 percent of the company’s shares, is difficult to predict.
The majority stake is a legacy of the more than $50 billion in public funds that were injected into the bank between 2008 and 2009, to provide financial stability in the wake of the 2008 global financial crisis.
Some local officials think Stamford could benefit from Brexit, through RBS or other businesses.
“We should see some new business here, but that will depend on the new banking regulations that are negotiated as part of the final exit from the EU,” said Thomas Madden, Stamford’s economic development director.
The bank last provided a public update on its local headcount in June 2018, when it reported employing about 500 at 600 Washington. Those employees focus on the bank’s NatWest
Marketsbranded sales and trading operations.
“As we have reduced the size of our global footprint, it now makes economic sense for RBS to sell the building at 600 Washington Blvd., and lease back the office space that we require,” RBS said in a statement when it announced in June 2018 that it would sell the building. “Our NatWest Markets U.S. sales and trading operations in Stamford remain a core part of our business, providing our customers with access to the U.S. dollar markets across currencies, rates and financing.”
RBS has not reported any mass layoffs to the state Department of Labor since June 2018. But the trend does not necessarily mean the company has not made any cuts since then because federal law does not require companies to publicly disclose all job losses.
Between the beginning of 2015 and mid2018, the bank laid off approximately 750 Stamford employees, according to
labor department data.
Those cuts reflected the fiscal and regulatory troubles had dogged the bank since it opened the approximately 450,000squarefoot building at 600 Washington in 2009.
Between 2008 and 2016, RBS incurred nine consecutive annual losses.
A number of runins with regulators compounded the company’s struggles.
In May 2018, the bank announced a $4.9 billion settlement with the U.S. Department of Justice to resolve an investigation into the bank’s sale and underwriting of mortgagebacked securities in the leadup to the financial crisis.
In February 2017, the U.S. Commodity Futures Trading Commission ordered RBS to pay an $85 million penalty to settle charges that traders at the Stamford offices tried to manipulate a benchmark for interestrate products during a period spanning the financial crisis.
Four months before the CFTC settlement, Connecticut’s thenAttorney General George Jepsen announced a $120 million settlement with the bank tied to its oversight of mortgagebacked securities. It represented the largest penalty
against a company in the state’s history.
The company bounced back in 2017 with a profit of about $1 billion and a profit of about $2 billion last year.
In June, RBS sold 600 Washington for $163 million to Philadelphia real estate-investment firm Rubenstein Partners, a deal that marked Stamford’s largest property sale this year. The company said the sale was not supposed to directly affect the remaining RBS employees.
At the same time, the company agreed to a 12year lease. A trio of financial institutions are also tenants in the steelandglass edifice: Bank of America, Citizens Bank and UBS.
“Our 12year lease term demonstrates our commitment to Stamford, and we believe that remaining in this building best serves our employees and our clients,” Paul Stevelman, head of RBS’ NatWest Markets U.S., said in a statement when the sale was completed.
RBS consecrated the deal with the installation of NatWest Market signs on the exterior of 600 Washington.
At the same time, changes at the Edinburgh headquarters will continue to affect the local contingent.