Job cuts on horizon as RBS reports £3.5bn loss

Thousands of workers are set to lose their jobs after the Royal Bank of Scotland reported a £3.5 billion loss.

The Royal Bank of Scotland has racked up total losses of nearly £50 billion since it was bailed out in 2008. Picture: Danny Lawson/PA Wire

Chief executive Ross McEwan said the Capital-headquartered bank would be reducing its overseas network as it sought to focus on the UK and western Europe, and it is understood many of the redundancies will occur abroad.

But today the bank refused to confirm whether any of the proposed job losses would affect Edinburgh, where RBS employs around 7500 people – with 3000 based out of its head offices in Gogarburn alone.

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An RBS spokesman declined to rule out redundancies in the city, adding: “In line with the strategy announced in February 2014 to make RBS a smaller, more focused bank, we are announcing further changes to our Corporate & Institutional Banking operations.

“These changes will see us become a stronger, safer and more sustainable business, more aligned to the needs of our core customers in the UK and western Europe.”

The majority of the bank’s international networks and transaction services will be sold or wound down in the new move, which will see RBS pulling out of 25 countries worldwide.

Mr McEwan admitted the lender’s £421 million bonus payments were “outrageous” after a seventh straight year of losses.

He said the bonus pool was down significantly on previous years but conceded that the public was right to be angry about the figure.

The bank racked up another £3.5bn in annual losses in 2014, taking the running total to nearly £50bn since it was bailed out in 2008.

But Mr McEwan said the company, which is still 80 per cent owned by the taxpayer, had made significant progress in becoming “stronger and simpler”.

He confirmed he will not take a £1m “role-based” incentive, which is paid on top of salaries by some banks, and said the company’s overall bonus pool had been cut by 21 per cent.

However, he said people were “quite right” to regard the sum of money the bank was handing out as “outrageous”.

He said: “It’s not something I am going to change or can change today.

“What I can do is focus on this business and you are starting to see the progress we have made after one year.

“The underlying profits of this business are up.

“The capital is up, the costs are down. We are focusing on rebuilding the trust of customers.”

Meanwhile, Lloyds Banking Group was expected to announce its first shareholder payout in seven years when it reports its annual results this morning.

It is understood to have won permission from the UK Government, which owns just under 25 per cent of the lender, to make the dividend payout.