RBS makes 7,000 redundant in ABN integration

by Gill Montia

Story link: RBS makes 7,000 redundant in ABN integration

Royal Bank of Scotland (RBS) has confirmed that up to 7,000 jobs will go as it continues the integration of Dutch bank, ABN Amro, which was acquired last year.

The bank is merging its investment and global banking divisions and a pre-redundancy consultation process is expected to begin this week.

Job cuts are expected to be predominantly among ABN staff, which number approximately 28,000.

The headcount reduction forms part of a merger that is scheduled for completion in 2010 and aims to achieve a £1.8 billion a year reduction in costs, although the group’s chairman, Sir Tom McKillop, has indicated that the benefits of merging the businesses could be greater than initially anticipated.

It is likely that RBS will attempt to speed up the ABN integration to reduce the liquidity pressures that last week drove it to announce a £12 billion rights issue.

The bank stretched itself with the £49 billion acquisition of ABN shortly before the credit crisis began.

Its Tier 1 capital ratio, which is a key measure of its capital holding against risk, is 4%, compared with HBOS’s 5.7% and Barclays’ 5.1%.