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Cull coming at RBS global banking and markets?

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.

Comments (14)

  1. Anyone at RBS who thinks the bank is going to remain a big player in trading activities is severely deluded. The same can probably be said for almost everywhere else though.

  2. guaranteed bonuses rear their ugly head again..well done RBS another fine plan.Any decent dice roller, who can win more than 50.1% of the time should just get a bigger cut of the profits,,,

  3. shares down 70% today – full nationalisation not far off = no investment bank at all = 100% job cuts…… Why would the UK gov want to own a (loss making) IB?

  4. International offices are doomed as the UK Government takes control of RBS. I worked for ABN for several years (moved on a couple of years ago) and I am 100% sure it would have gone bust alone, without the held of RBS paying a ridicule price for a below average bank at the worst possible moment.

  5. we’re getting a lot of outstanding CVs from a RBS acquisition which, despite being a bit of a global star, appears to have suffered politically in its new context. people there aren’t happy, and if (when) they walk, a lot of RBS’s current pnl walks.

  6. 28 billion loss, what bankers at RBS will make the UK government default…

  7. RBS is the new BBC.

  8. The question is who is next. Rumour is Barclays is going to announce high losses as well. RBS’s problems were apparent since last year.

  9. I have been saying a long time ago that RBS would pay a terrible price for its subpar risk management practices. Also Jesus was an alien!

  10. if u look at the numbers closely, the results are looking due to write off of goodwill paid for ABN AMRO, almost $20Bln, without this the impairments and revenue are break even…. the actual trading loss is around the same as of Citi and BOA / Duestche… the only reason is over exuberance to win a battle for ABN AMRO that became an ego issue at the highest level, and as they say… decision made under waivering EQ usually leads to casualties…. big time in this case…

  11. Suggestions: 1 get Fred the Turd & his IB cronies to cough up what they robbed from staff & British taxpayers. 2 sell USA business & ABN. 3 failing that, stick to UK & retail banking. Because there’s never been a globally successful British IB. Barclays? Deutsche wannabe & failing. HSBC? Failed IB & not from UK. Brits are shopkeepers, not IBers

  12. Let RBS go under. Why bother?

  13. Whatever the outcome, it will be us all UK tax payers bailing the banks out. The way all these top bankers are insanely rewarded must change now.

    Andres Salazar Reply
  14. sell abn back to the dutch. abn was far better in the hands of the dutch than the egoistic scotts.

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