RBS warns of further job cuts

03-04-2009

RBS warns of further job cuts
The Royal Bank of Scotland is set to cut more jobs – both internationally and in the UK.

RBS chairman Sir Philip Hampton is to tell shareholders today at a meeting in Edinburgh there will be further job cuts, beyond the 2,700 already to go, as the firm tries to cut £2.5 billion in costs.

He is to say: "Clearly this will mean that some of our people will lose their jobs.

"In the UK this year so far we have announced around 2,700 posts will go.

"We can only be honest and say that this will not be the end of the story and more are expected in the UK and internationally in the period ahead."

But he pledged to keep compulsory redundancies to "an absolute minimum".

However, Sir Phillip will call for an end of the public flogging RBS has been suffering – after the public bailing out and controversy over the former chief executive Sir Fred Goodwin's pension.

"Key lessons have been identified and will be learned.

"We do accept the rightful scrutiny of shareholders, the media and of politicians held accountable by the voters for the massive taxpayer support for banks in the UK and elsewhere," he will say.

"However, I believe we should bring an end to the public flogging and focus on the good and enduring people and businesses of RBS and allow them to earn our way back to success."

He claims "too much is at stake to allow today's storms to restrain tomorrow's potential".

Sir Phillip adds the losses were caused by "only a tiny minority of staff" who have now left.

The RBS chairman also tried to bring together the concerns of all shareholders – both private shareholders and the government which has a 70 per cent stake in the lender.

"The task before us is one that should unite the company and all of our shareholders; government, institutions and individuals," Sir Phillip will say.

"The UK government has made clear that it means to ensure its investment in us is managed at arm's length by UKFI. The intention is to ensure that the taxpayers' long-term interest is held paramount which means the group will continue to be run on commercial grounds and therefore private and public shareholders' interests will be aligned."

However, he will claim the firm was offering lending commitments, which could be considered not the soundest commercial move, "to produce a clear and definable benefit to the UK economy from the risk the UK taxpayer is taking by standing behind us".

Sir Phillip outlined how the running of RBS had changed since the departure of Sir Fred under the new chief executive Stephen Hester.

"Our new chief executive has, at his own insistence, a clause in his contract ensuring that he will receive no reward if he leaves the company for reasons of his own failure," he said.

"Would we choose Formula 1 sponsorship if we were starting from here? No.

"Should we retain a corporate jet? Of course not and Stephen Hester put it up for sale immediately on taking up his post."

He adds a medical scanner bought by RBS in an Edinburgh hospital for use by RBS staff has been handed over to the NHS.

Turning to Sir Fred's pension, the chairman called for the issue not to "go on and on".

"I do understand that many shareholders will wish to vote against or abstain on the advisory vote on the Remuneration Report to register their strong disapproval of the pension arrangements of our former chief executive.

"I think there is little more that can be said here that isn't already in the public domain. Clearly, this is an issue of significant political and public concern and we all fully understand that.

"Legal advice is being taken about whether the decision that was reached can be revisited. Whatever the outcome of that advice, it is in no-one's interest, least of all RBS Group's, for this issue to go on and on. The current board are doing all that we can to bring this subject to a conclusion."

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