RBS shrinks investment bank by a quarter

 
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For a bank that has shed 30,000 jobs across its worldwide operations over the past couple of years, most of them in the UK, a further 3,500 departures may not seem massive.

But it still represents huge numbers of people leaving the semi-nationalised bank, most of them this year.

And perhaps as significantly, there is a withdrawal by RBS from an entire loss-making business, the trading of shares and advising companies on takeovers.

RBS will still be big in investment banking - and will still pay big bonuses - but will concentrate on trading foreign exchange and bonds, and helping big companies manage their finances and cash.

However, what it calls its Global Banking and Markets division will be broken up into a new purer "markets" business and an "international banking" operation.

Even those residual operations will be shrunk, as the amount that its investment bank borrows and lends will be cut by £120bn, or more than a quarter, over three years.

And RBS will borrow £75bn less on unreliable wholesale markets.

The overall aim is to improve profits and reduce risks. Which matters to most of us, since taxpayers are sitting on losses of £26bn on the £45.5bn they invested in RBS to rescue it (and see my earlier post).

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    +14

    Comment number 8.

    @4. the_hot_chef - In what way is a back office admin clerk on £20-25,000pa a leech? Do you really think all "bankers" get bonuses or have the ability to rack up huge gains and losses? I suggest you know little of how the business operates.

  • rate this
    +10

    Comment number 15.

    It does make me laugh reading the same old Drivel from people who have absolutely no idea what the Banking sector contributes to the British Economy.

  • rate this
    +9

    Comment number 7.

    @3. John M

    Nice one John.
    Lets shrink all none productive "Service Sector" Jobs.
    Then we can WORK our way out of the next down turn instead of CUTTING our way out. Lets get our hands dirty and start working again.

  • rate this
    +8

    Comment number 29.

    http://tinyurl.com/82ow53q

    "In the 2009/10 tax year, the UK financial services sector as a whole made a total tax contribution of £53.4bn, 11.2% of the Government's total tax receipts for that year."

    Yeah lets sack them all! Let's re-employ the miners to replace them. It can be just like 1975! Great.

    Some of you need to wake up and face facts, rather than being sad 70's throwbacks.

  • rate this
    +8

    Comment number 32.

    What poisonous glee!

    A bank employs a wide range of people and utilises the services of a wide range of organisations.

    Behind every cut is a person, often with a family and financial responsibilities which they will no doubt struggle to meet.

    There's nothing about growth in this statement and nothing to be cheery about.

 

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