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Royal Bank of Scotland revamp may claim 30,000 jobs

Royal Bank of Scotland, or RBS, is to shrink its investment banking and international operations in a revamp in which the group could shed up to a quarter of its 120,000 workforce, sources familiar with the matter said.

The part-nationalised bank has given in to demands from politicians that it focuses on lending to British households and businesses and maintains only a downsized investment banking business to service corporate clients, one source said.

RBS, which is 81 per cent owned by the British government, could reduce its headcount by up to 30,000 as part of the reorganisation, according to sources familiar with the matter. But that figure includes previously announced plans to sell its US retail business Citizens, which accounts for 18,300 jobs, and a UK retail business, Williams & Glyn, which employs 4,500.

RBS was rescued by a £45.5 billion ($75.80 billion) government bailout during the 2008 financial crisis. Since then, the future of its investment bank and Citizens has been a source of friction between RBS’ management and Britain’s finance ministry.

Finance Minister George Osborne wants RBS to be more like state-backed rival Lloyds Banking Group, which has minimal investment banking operations and concentrates on domestic lending. Lloyds is expected to return fully to private ownership in the next 12 months while RBS is three to five years away.