Royal Bank of Scotland plans to slash 3,500 jobs — including a small number of positions in the Middle East — as the group shrinks its investment banking arm.
Simon Penney, CEO for the Middle East and Africa, told Gulf News that the cuts, which will affect the bank's equities, capital markets and mergers and acquisitions arms, will result in the loss of a "very low, single digit" number of job losses in the Middle East M&A (Mergers and Acquisitions) division.
He also said that RBS remained committed to the Middle East, where it employs a total of 220 people across the RBS Group and Coutts.
"We have people in this region in M&A but it is less than one per cent of our total population and by and large we are not impacted by job losses. It's in the very low single digits and for, all intents and purposes, it is negligible," he said.
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"People see the headlines in the UK press and get the message that we are exiting the Middle East, and that is absolutely not the case."
In a statement yesterday, RBS said it was considering sale or closure of its cash equities, corporate broking, equity capital markets and mergers and acquisitions, which had an income of £220 million (Dh1.3 billion) between January and September 2011 and are "currently unprofitable".
"We intend to retain our leading investor products business internationally in equity and fixed income derivatives. This business is both profitable and provides valuable funding for RBS," the statement said.
Penney said that RBS would not be the only bank to restructure its operations in the face of economic difficulty and a shrinking market.
He said RBS has strong products as well as those they had hoped would pick up, for example M&A.
AFP reported yesterday that RBS has now slashed almost 34,000 jobs since October 2008 when it was rescued by the British taxpayer at the height of the global financial crisis.
The group, under the leadership of then-chief executive Fred Goodwin, was hit at the same time by the disastrous takeover of Dutch bank ABN Amro at the top of the market in 2007. The structural overhaul is aimed at meeting the ring-fencing requirements announced by the Independent Commission on Banking and adopted by the government last year.
The ICB recommended that banks should separate their retail and investment divisions to help prevent a repeat of the global financial crisis that triggered massive state bailouts.
"It is clear that, particularly in the wholesale banking arena, significant new pressures have emerged," RBS Chief Executive Stephen Hester said in yesterday's statement.
"The changes we are announcing today seek to ensure that RBS is at the front of the pack in pursuing a strategy that reflects the environment we expect to operate in.
"Our goal from these changes is to be more focused for customers, more conservatively funded, more efficient and with better, more stable returns for shareholders overall."
Further details will be provided in the bank's annual results that are due on February 23. The new plans will begin immediately but may take up to three years to implement.