Cull coming at RBS global banking and markets?

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The outlook for bankers in RBS' global banking and markets division hasn't been particularly promising for some time, but it suddenly looks even worse.

RBS signaled this morning that it made the biggest loss in UK corporate history for 2008, thanks entirely to its global banking and markets division. Its shares subsequently fell 40% in morning trading.

RBS global banking and markets currently employs some 17,300 people globally, around 6,000 of whom came from ABN. A first round of job cuts has already taken place - 2,700 jobs, around 14%, went from the division at the end of last year.

Insiders say deeper cuts have been postponed while the entire RBS business is reviewed by McKinsey, a process which is expected finish in the next six months.

However, given today's losses and the possibility of increased government intervention following the conversion of its preference shares into ordinary stock, a high proportion of global banking and markets jobs are surely numbered.

"We know that trading teams have been downsized already by 25% and we understand there will be more job cuts in February," says Simon Maughan, banking analyst at MF Global.

One RBS/ABN banker structured credit banker let go in an earlier round of redundancies says former colleagues still employed at RBS are twiddling their thumbs: "A lot of people aren't doing anything. They've made a few redundancies, but have been focused more on external problems."

"A massive cull of up to 50% of the securitization team is expected," says one (formerly) securitization focused headhunter. "There have been some redundancies, but relatively few so far."

Some RBS bankers are still doing well, however. Doug Tiesi, head of real estate structured finance at RBS, is said to have joined the bank on a multi-year guarantee in 2007 and may therefore be assured of a good bonus this year, despite losses linked to his business area. RBS declined to comment.