RBS slashes 2300 jobs

ROYAL Bank of Scotland is to restructure its business with the loss of up to 2300 jobs, the company announced today.

The Edinburgh-based banking giant said the cuts would not affect customer-facing branch staff and pledged to make every effort to keep compulsory redundancies to a minimum.

The bank, now 68 per cent-owned by the Government, said the cuts represent around two per cent of the group's workforce of 106,000.

It is not yet known where the jobs will be lost, but the cuts are expected to affect RBS offices across the UK

Meanwhile, the four ex-chiefs of Royal Bank of Scotland (RBS) and HBOS admitted to having no formal banking qualifications between them in today's dramatic grilling by MPs.

Members of the Treasury Select Committee heard how not one of the witnesses – who presided over two of Britain's biggest and worst hit banks – had technical banking training.

In exchange for £20bn of public funds, the government now has a stake of almost 70 per cent in the lender. RBS announced 3000 job cuts in October.

The bosses – including former RBS chief executive Sir Fred Goodwin – were forced to defend themselves against tough questions over their suitability to lead the banks, which had to be bailed out with billions of pounds of taxpayers' cash.

Sir Fred denied he lacked experience, saying he had a degree in law and was a qualified chartered accountant, while also having worked as chief executive of the Clydesdale Bank and Yorkshire Bank before joining RBS.

Sir Tom McKillop, previously chairman of now part-nationalised RBS, said he was "certainly numerate", although he conceded he had not studied banking specifically.

Andy Hornby, who had headed HBOS until its rescue takeover by Lloyds TSB, said he had gained an MBA at Harvard Business School, while his ex-colleague Lord Stevenson said he had a history as an entrepreneurial businessman.

MPs on the committee said it had been a central recommendation of theirs in light of the Northern Rock collapse that senior banking staff should hold a banking qualification.

However, the former titans of the UK banking sector were left struggling to say how many of their board directors held such qualifications.

Mr Hornby sought to reassure that the bank's executive board had a combined experience of more than 300 years in financial services.

But one MP was met with silence from the under-fire bankers when he asked: "This committee thinks that a banking qualification is important. Does any one of you think a banking qualification is important?"

The under-fire ex-chiefs had apologised earlier today for the "turn of events" that led to their banks being bailed out by the Treasury.

Lord Stevenson of Coddenham, former chairman of HBOS, told MPs that he and former chief executive Andy Hornby were "profoundly sorry".

Sir Tom said he would "echo" the comments and said he made a full apology in November.

Appearing before the Treasury Select Committee, Sir Fred added: "I apologised in full and I'm happy to do so again."

Lord Stevenson said: "We are profoundly and, I think I would say, unreservedly sorry at the turn of events.

"All of us have lost a great deal of money, including of course a great number of our colleagues, and we are very sorry for that.

"There has been huge anxiety and uncertainty caused for particular of our colleagues but also, for periods of time, for our customers.

"And I would also say we are sorry at the effect it has had on the communities we serve."

Sir Tom added: "I would echo Dennis Stevenson's comments. In November last year I made a full apology, unreserved apology, both personally and on behalf of the board, and I'm very happy to repeat that this morning.

"We were particularly concerned at the serious impact on shareholders, staff, and indeed the anxiety it caused to customers, so I would very much echo Dennis Stevenson's comments."

Sir Fred said there was a "profound and unqualified apology for all of the distress that has been caused".

Sir Fred denied RBS had ignored warnings from the Bank of England and the Financial Services Authority, insisting that nobody had anticipated the scale of the crisis.

"I've gone over this time and time and time and time again in my mind as to what was the point at which we should have seen this differently," he said.

"And I come back to that, at the time, there was a view – not that things would continue forever – there was a definite mood that the economy in this country and generally was going to slow down, that the financial markets were going to slow down, but at no point did anyone get the scale or the speed of this, and that was what was so damaging about this slowdown.

"It wasn't that our business was premised on everything continuing to go upwards forever.

"But that things could turn as quickly as they did, I don't think anyone saw, and I don't think, in fairness to the Bank of England, that they really saw it was going to turn this quickly.

"I think everyone saw it was going to come at some point but for it to turn in the way it has and so profoundly and globally is the part that has caught everyone out. It was not possible at the time to envisage."
Mr Hornby said the banks would have to focus their attentions more in future.

"Clearly there is a definite need for banks to concentrate on simplicity," he said.

"No-one would argue with that – there is a clear message in what has happened."