RBS, Overwhelmed With Emergency Loan Requests, Cuts 130 Jobs At Investment Bank Unit

Royal Bank of Scotland Group (RBS) said it cut more than 130 jobs at its lossmaking investment banking unit, NatWest Markets.

RBS, which is 62%-owned by the British government after receiving a massive bailout during the 2008 financial crisis, had temporarily paused most its planned cost-cutting and restructuring measures in order to deal with the ongoing coronavirus pandemic.

"Where restructurings proceed, we will seek to mitigate impacts for employees and customers, which will include delaying exits and continuing to pay employees, in certain cases, until [Sept. 30]," a spokeswoman for NatWest Markets said. NatWest Markets said it is now “being refocused into a smaller, simpler business focused on the needs of the group’s core corporate and institutional customers.”

Unite, the union which represents many RBS workers, said laid off employees will leave the bank in June.

"Unite had strongly opposed these redundancies and called for all notices to be stayed and no staff member to be declared redundant during the current national crisis," said Rob MacGregor, Unite's national officer.

MacGregor added: “Our position is quite clear, all these [restructurings] should be paused . . . because we don ’ t know what the lay of the land will be post-crisis… For a bank that’s still majority-owned by the British taxpayer, and one that owes the taxpayer more than any other corporate entity in our history, this is not a smart move by the [RBS] leadership team.”

Separately, RBS, which is in the process of changing its name to Natwest Group, said it has been deluged with emergency loan requests from businesses – at a rate almost ten times the normal volume.

"Our call centers normally take 3,000 calls a day; we are now receiving 25,000 which is why I'm redeploying staff, retraining staff and getting people to help," said Chief Executive Alison Rose. "The money is starting to move but I appreciate it is a very desperate situation for a lot of businesses.”

Many small businesses across Britain are struggling and have not received requested loans yet.

"I recognize the challenge [businesses are facing], which is why we restructured our business, we refocused our people; we are putting funds out as quickly as we physically can to these businesses to help them during this period," Rose said

But she cautioned that banks are "not about to start writing blank checks."

Rose added that the bank has approved nearly 70,000 mortgage holidays.

Rose also said that she will relinquish her pay and bonuses – which are worth up to £2.3 million ($2.85 million) – in honor of the fact that so many of her bank’s customers are struggling and anxious.

"In the current environment, many of our customers are worried about their jobs and their businesses and, in recognition of this, I have taken these decisions on my own pay," she said.

Rose also said she will donate a quarter of the money she is due to receive for the last nine months of the year to a coronavirus appeal fund.

The bank’s chairman Howard Davies will also give 25% of his pay for the rest of the year to the National Emergencies Trust coronavirus appeal, which raises funds for local charities and grassroots organizations.