RBS to sell off £300bn worth of assets

| February 22, 2009 | 0 Comments
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Royal Bank of Scotland (RBS) is set to embark on a major restructure which will see it sell off at least 20% of its business worth around £300 billion.

The bank is due to announce its full-year results on Thursday and is expected to report a £28 billion loss - setting a record in UK corporate history.

Newly-appointed chief executive, Stephen Hester, is to unveil details of the plans this week, which will also see the bank split into a “good bank” and “bad bank”.

According to The Sunday Telegraph, Mr Hester will adopt a similar approach which he implemented during his tenure at Abbey and it is hoped the new structure will bring some clarity to employees and to shareholders.

The bank is also set to withdraw from about half of the 60 countries in which it operates, which includes parts of Eastern Europe and Asia.

However, jobs are expected to be lost with a headcount reduction of between 10% and 20%, according to reports. This is on top of the thousands of positions which have already been eliminated.

Mr Hester was appointed chief executive of RBS last year after the departure of Sir Fred Goodwin. Since taking over, he has offloaded the bank’s 4.2% stake in Bank of China.

In related news, Chancellor Alistair Darling announced last week that the Government has limited the bonus pot for staff at RBS.

The bonus total for 2008 was £2.5 billion but this will be slashed to £340 million for 2009 - and is set to be paid in shares only, said Mr Darling adding “There would be no reward for people who have failed.”

Bonus packages have been the subject to a lot of bad press recently and has sparked outrage among the public when it is banks who are being blamed for the recession.

RBS bonuses, in particular, have been subject to heavy criticism since former chiefs of the bank recently apologised “profoundly and unreservedly” for the near-collapse of their banks.

RBS is almost 70% owned by the taxpayer and received an injection of £20 billion last autumn to prevent it from collapse.

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