200 jobs go at Royal Bank of Scotland
As the credit squeeze continues to bite, the Royal Bank of Scotland (RBS) has announced it is to lay off 200 staff in its global banking and markets business.
The jobs will primarily be in RBS’s leveraged finance, real estate lending and securitisation operations and are believed to have been made as a result of the continued downturn in the worldwide financial markets rather than due to the bank’s merger with Dutch bank ABN Amro last year as widely expected.
RBS refused to comment on the changes to its workforce but said most global financial institutions are reviewing their business in view of the current market conditions and we’re no exception.
The majority of the job losses are understood to be in London rather than at the group’s head office in Edinburgh. Global banking and markets accounts for over 30% of RBS’s profits and, combined with ABN’s operations, employs over 28,000 people.
Analysts believe RBS to be one of the UK banks most heavily exposed to the credit markets due to its higher gearing and its exposure to riskier areas such as real estate. The bank has £65 billion worth of exposure to UK commercial real estate.
As a result of the global economic slowdown, nearly 8,000 jobs are expected to be shed in the financial service sector in the City this year.
Swiss bank UBS is expected to shed thousands from its 9,000-strong London workforce while JPMorgan is still deciding which parts of Bear Stearns’s European business it will keep following its take-over of the crisis-torn bank.