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Royal Bank of Scotland says it will cut 3,700 jobs
2009-11-02
LONDON (AFP) - Royal Bank of Scotland, rescued by the British government in the wake of the global financial crisis, said Monday that it planned to axe about 3,700 jobs across its retail operations in Britain. "RBS has begun a process of consultation with staff in the UK regarding a restructuring of its Retail Banking division that will result in losses of approximately 3,700 jobs," the state-owned banking group said in a statement. The announcement comes as the British government is on Tuesday set to lay out plans to break up Royal Bank of Scotland and another lender it rescued, Lloyds Banking Group. RBS earlier Monday said it would consider selling more assets than initially planned to win EU support for the state aid received by the group, sending its shares plunging. The embattled company, which is 70-percent owned by the taxpayer after a huge bailout last year, added it was close to an agreement over the terms of its participation in a government scheme to insure toxic or high-risk assets. Media reports on Sunday suggested that RBS could be forced to sell its Churchill and Direct Line insurance division and part of its investment banking arm, to allay European Commission (EC) concerns about state aid. Also over the weekend, British finance minister Alistair Darling outlined plans to create three new high street banks from the bailed-out lenders RBS, Lloyds Banking Group and Northern Rock. Darling, the chancellor of the exchequer, said the three existing lenders would be broken up and parts sold in the next few years to new entrants to the sector, who would concentrate on deposits and mortgages. Firm details regarding the planned break-ups were set to be announced on Tuesday. According to reports, the Labour government will pour up to another 40 billion pounds (44 billion euros, 66 billion dollars) into the bailed-out lenders ahead of selloffs. Lloyds Banking Group (LBG) is 43-percent owned by the state while Northern Rock was nationalised outright. The two banks plus RBS received huge government bailouts at the height of the global economic storm but regulatory authorities are concerned about such state-backed banks having an unfair advantage over those that were not helped.
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