Restructuring plans for the investment arm of one of the largest personal and business bank account providers in the UK could see the elimination of as many as 5,000 jobs, according to a new announcement.
Banking giant Royal Bank of Scotland announced this past August that around 2,000 jobs could be eliminated as it put the finishing touchs on integrating ABN Amro. The acquisition was the key cause of RBS running aground in 2008, leading to a massive government bail out with taxpayer money.
However, industry experts say that the total jobs loss has a likelihood to be much higher due to bleak economic conditions in the eurozone and market conditions further deteriorating. Some estimates have been as large as 5,000 eliminated positions within RBS, which has declined to comment.
The taxpayer-owned financial services provider has been reviewing its global markets and banking division, and expectations are that Stephen Hester, chief executive, could pull a hatchet job on a percentage of its European branches in order to concentrate on markets within the US and UK.
Due to the bank’s exposures to the turbulent Greek economy, RBS suffered half-year losses of nearly £800 million earlier in 2011. The bank also had to shell out £850 million in provisions in order to cover compensation for instances of payment protection insurance mis-selling.
However, a lack of major corporate deals, recent turmoil in the stock market, and more burdensome regulations have aided in putting banks under more pressure over the past few months. The effects are expected to be highlighted in Goldman Sachs’ soon to be results, where third quarter forecasts are showing a 50 per cent drop to $4.93 billion (£3.1 billion).