Thousands of RBS workers face axe in bid to save £2bn
Chief executive insists future bank ‘will be smaller than it is today’
THOUSANDS of jobs will be lost and branches closed as ailing Royal Bank of Scotland moves to save £2 billion over the next three years.
The bank announced the huge cost-cutting moves, including £750 million of savings this year, after reporting losses of £7bn, its ninth consecutive year in the red.
The latest financial results for the lender, which is 72 per cent owned by the taxpayer, show it has been stung by billions in restructuring, conduct and litigation charges and has now notched up losses totalling more than £50 billion over the past eight years.
Chief executive Ross McEwan did not reveal where the axe will fall, but predicted that the bank will soon be “smaller than it is today”.
Meanwhile, the bank’s annual report, also released yesterday, warned that a second Scottish independence referendum could have a “negative impact” on RBS’s operations.
The report gave a similar warning over the risks associated with the UK’s exit from the EU.
RBS currently has 1,250 branches, and its overall headcount has shrunk from 170,000 before the financial crash in 2008 and 2009, to just under 80,000 today.
Mr McEwan, whose total remuneration package from the bank was revealed to be £3.4m, announced that talks will be held with affected staff before the scale of the job cuts are revealed.
He said: “My view is we talk to our staff before we talk to anybody about individual jobs that are going.
“It’s very clear that with £2bn coming out of this business in the next four years to get us back into a competitive shape, there will be job losses that we have to go through, and they will be across the business as we do get this business back into shape.”
He added: “Customers aren’t going into a branch to move money. They are actually using automated ways of doing that themselves.
“The issue of cheques is declining quite rapidly, so the having to go into a branch for a cheque is declining.
“So the use of a branch is coming around servicing and it’s coming around more of advisory network, as opposed to a transaction point.
“I don’t have a number for branches, but it will be smaller than what it is today, given customer usage.”
The cost-cutting plans were greeted with dismay by Unite, Britain’s largest union, which said that workers should not pay for the bank’s “reckless greed” in the past.
Calling for a moratorium on job cuts and branch closures, Unite national officer Rob MacGregor said: “Nearly 10 years on, shamed banker Fred Goodwin’s legacy haunts RBS employees and their families.
“Having closed over 520 branches since 2014, RBS is chief among its competitors in shutting branches and slashing jobs.
“Its ruthless approach to pay for the mistakes of the past jeopardises customer service and risks, leaving communities and businesses reliant on their local bank branch high and dry.”
The result comes a week after the Treasury proposed a plan to abandon the sale of RBS’s Williams & Glyn branch network, which will cost the lender £750m.
The bank had been required to offload Williams & Glyn by the end of the year as part of EU conditions on its £45bn bailout at the height of the financial crisis.
MP Jonathan Reynolds, Labour’s shadow City minister, said that there needed to be a conversation about the long-term future of RBS.
He said: “Today’s results show the Royal Bank of Scotland still has much to do to overcome the legacy of the financial crisis.
“Whilst the core banking business