RBS Eliminates 450 Jobs As Restructuring Continues

The Royal Bank of Scotland Group (LON:RBS) plc (TO:RBS) is reportedly eliminating 450 service jobs as it scales back operations to focus on retail and commercial banking business in the U.K. Also, further job cuts are expected to be announced in the upcoming weeks. The news was first reported by the Financial Times on Sunday, citing people familiar with the matter.

In a statement the bank noted, “As RBS becomes a smaller UK-focused bank, we are restructuring our support services to better align with the business we are becoming. These changes unfortunately mean some job losses.” RBS also added, “We understand how difficult this is for our staff and will be offering as much support as we can including redeployment to other roles where possible.”

The downsizing should not come as a surprise to investors as RBS, which was rescued from the onslaughts of the crisis with a £45 billion bailout by the British government in 2008, is striving for growth with several cost reduction initiatives including reduction of head count and branch closures. The company continues to face revenue pressure amid low, sometimes even negative interest rates and slow growth in economy. Notably, 2015 marked the eight straight years of annual losses.

At a time when the government backed banking giant is burdened with numerous litigations and operational inefficiencies, we remain optimistic about the vast restructuring moves. These moves should not only enhance the company's capital levels but also shift its focus to more profitable markets and pave the way for sustainability and growth in the long run.

RBS currently carries a Zack Rank #4 (Sell). Some favorably ranked stocks in the foreign banks space include Australia & New Zealand Banking Group Limited (OTC:ANZBY) , Bank of Montreal (TO:BMO) and Itaú Unibanco Holding S.A. (NYSE:ITUB) . Both Australia & New Zealand Banking Group and Bank of Montreal sport a Zacks Rank #1 (Strong Buy) while Itau Unibanco carries a Zacks Rank #2 (Buy) .


ROYAL BK SC-ADR (RBS): Free Stock Analysis Report

BANK MONTREAL (BMO): Free Stock Analysis Report

BANCO ITAU -ADR (ITUB): Free Stock Analysis Report

AUST&NZ BKG-ADR (ANZBY): Free Stock Analysis Report

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