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13th January 2012

RBS Corporate restructuring

Royal Bank of Scotland announced that 'it is considering' the sale or closure of cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses. In practice there can be no doubt it will happen. RBS stressed its commitment to the other Global Banking and Markets (GBM) businesses which were profitable. Secondly and potentially of more significance, is the announcement that Capital used by GBM is to reduce from the current level of £420bn down to £300bn by not later than the end of 2014. This in turn is estimated to reduce its wholesale funding requirements by approximately £75bn. Risk Weighted assets under Basel III are also expected to fall £75bn.


Global Transaction Services division will be ended with larger corporate business merged into GBM Corporate banking and small corporate business depending on location merged into RBS domestic, Ulster or Citizens.


The changes are expected to lead to a further 3,500 jobs lost over the next three years. The exiting of corporate broking translates to the sale of Hoare Govett, in part, or more likely as a whole.


The announcement was a response to the many reports that these changes were planned. Full details will be provided with the bank's 2011 results, to be released on 23rd February.