Lunchtime Links: RBS is declining to comment on the new rumour that it’s closing its entire equities unit

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Shuttered shop

More colour on this morning's RBS job abomination rumours.

Bloomberg claims that the bank is contemplating shutting or selling its equities unit, ‘including’ – but not limited to – Hoare Govett. The implication is that the entire business will be closed.

This seems a little weird given that RBS has been building its equities unit recently. In June, we were told it had around 12 equity research roles to fill in London alone. In August, Financial News said RBS was hiring in equities, “for all functions and in all regions.” In September, it made some senior equities hires in Asia.

According to Bloomberg, RBS has 1,000 people in its equities business and will make an announcement about their future before its full year results in February. Equities headhunters say the rumour about a major equities downsizing has been in the market for sometime, but hasn’t been given much credence. “They’ve hired a lot of very, very senior people and shutting the business would seem a strange thing to do,” says one.

RBS declined to comment on the rumours. However, its results suggest the equities build out may not be going entirely to plan. In 2009, revenues in cash equities were £1.5bn; in 2010 they were £933m; this year, they are on track to be around £730m. At only 12% of revenues in the Global Banking and Markets division and one of its smallest business areas, it’s easy to see why cash equities might seem the easiest thing for RBS to sacrifice. However, other businesses would also need to be shuttered to satisfy the Telegraph's claim that RBS is thinking of closing 'half' its GBM business areas.

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