RBS to cut 3,500 jobs

Royal Bank of Scotland is to cut around 3,500 jobs as it sells and shrinks parts of its investment bank.

The bank, which is 83 per cent owned by the Government, says the cuts will come across its UK and international offices as its looks to exit the cash equities, corporate broking, equity capital markets and mergers and acquisitions businesses.

The bank is planning to split its wholesale banking business, which services its larger clients, into “markets” and “international” banking divisions.

The bank has also confirmed that it intends to sell-off its corporate brokerage business Hoare Govett.

RBS is making the move as part of its plan to reduce its balance sheet from £420bn to £300bn over the next three years. It says the move will cut its borrowing from wholesale money markets by £75bn. The bank also said the move was designed to prepare it for the new regulatory requirements which demand that banks ringfence their UK activities from investment banking activities.

Group chief executive Stephen Hester says: “For our strategy to be effective, it must adjust to fresh challenges.  And it is clear that, particularly in the wholesale banking arena, significant new pressures have emerged.  The changes we are announcing today seek to ensure that RBS is at the front of the pack in pursuing a strategy that reflects the environment we expect to operate in.

“Our goal from these changes is to be more focussed for customers, more conservatively funded, more efficient and with better, more stable returns for shareholders overall.”