RBS announces further job cuts and calls for an “end to public flogging”

| April 3, 2009
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Royal Bank of Scotland (RBS) has announced it will make further redundancies worldwide.

The fresh job losses are in addition to the 2,700 job losses already announced.

The bank’s chairman, Sir Philip Hampton said: “We can only be honest and say that this will not be the end of the story and more job cuts are expected in the UK and internationally in the period ahead.”

At the end of February the bank, which is 68% owned by the taxpayer, reported a full 2008 year loss of £24.1 billion – the largest annual loss in UK corporate history.

The bank is also under attack for its past mistakes, for which Sir Philip is calling for an “end to the public flogging.”

In addition to its bad press, former Chief Executive Officer Fred Goodwin, has been subject to criticism for his pension package.

Sir Fred was awarded a pension worth a total of £16 million but it has been highly criticised since he and former ex-chairman of RBS, Sir Tom McKillop, have been blamed for the near collapse of the bank.

Sir Philip blames RBS’ problems difficulties on its acquisition of the Dutch bank ABN Amro in 2007. The acquisition was made at a price considered high by many analysts, leaving RBS’ balance sheet exposed on the eve of the credit crisis.

Last year, the bank had to write off £16.2 billion because of previous acquisitions, primarily ABN Amro.

In the meantime, the group’s directors will today face shareholders at its annual meeting in Edinburgh.

Last year, RBS embarked on a £12 billion rights issue and RBS shareholder action group spokesman, Michael Lamoureux, said shareholders had been “grossly misled in the prospectus” and were being contacted about taking a class action against the bank.

Mr Lamoureux, told the BBC that “the bank perpetrated the biggest crime in financial history in the UK” via the rights issue.

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