We understand that RBS’s conference call to its equities business yesterday wasn’t entirely reassuring

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There’s something strange about RBS’s equities pullback. It’s supposed to be driven by an objective analysis of the realities by McKinsey & Co, but there’s a lingering sense that the nascent RBS equities business may have been stitched up by the more established RBS fixed income business following George Osborne’s insistence that RBS’s investment banking aspirations must be heavily curtailed.

The pullback seems all the more strange given that RBS is allegedly still interviewing for some equities positions. Equally, there was that Financial News interview at the end of November, in which RBS claimed it was halfway through building its electronic execution business, which had gained 30 new clients over year. The pullback also seems strange given that most banks want to expand in cash equities as a low risk, low capital intensive, steady revenue stream for the future.

In the circumstances, RBS’s conference call to members of its equities business yesterday might have been expected to reassure everyone that recent reports that the entire business was about to be closed, were merely an exaggeration. Apparently not.

Headhunters say they’ve been receiving a lot of calls from RBS equities staff who were not reassured at all.

“I heard they had a call with Frank McKirgan,” says one equities headhunter in London. “He highlighted what had been reported in the press, but didn’t really offer any reassurances. The mood seemed to be that the whole of equities will go. It’s very sad, they have some excellent people.”

RBS equities staff who contact headhunters for help are not getting much solace. “No one else is hiring right now,” says one. Some RBS equities professionals who joined this year reportedly received guarantees, and are comparatively fine. Others received ‘conditional bonuses,’ and aren’t.

The real hope now is apparently that either RBC or Santander buys the entire RBS equities business in the New Year. In the meantime, anyone working in the division can be excused for feeling less than festive.

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