RBS says to axe more jobs worldwide

RBS says to axe more jobs worldwide
AFP
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First Published: Fri, Apr 03 2009. 01 03 PM IST
Updated: Fri, Apr 03 2009. 01 03 PM IST
London: Royal Bank of Scotland chairman Philip Hampton said Friday that RBS will shed more jobs globally after already axing 2,700 roles in Britain this year, as it looks to recover from the financial crisis.
“In the UK this year so far we have announced around 2,700 posts will go. We can only be honest and say that this will not be the end of the story and more are expected in the UK and internationally in the period ahead,” Hampton said in a speech he was to give at the bank’s annual general meeting later Friday. Extracts of the speech were posted on the London Stock Exchange newswire service ahead of the meeting due at 1200 GMT.
The gathering in Edinburgh is expected to be extremely fraught, with shareholders set to vote against a huge payoff to RBS’s disgraced former chief executive Fred Goodwin.
Royal Bank of Scotland is among the British lenders worst affected by the credit crunch.
It is 70% owned by the British government after a massive bailout and posted a loss of more than £24 billion ( $35 billion ) in 2008 -- the biggest in Britain’s corporate history.
As well shedding billions of pounds in write-offs linked to the collapse of the US housing market, RBS also suffered fallout from its costly and mis-timed takeover of Dutch lender ABN Amro.
“The past is done, we cannot change it. We must recognise what has happened and why, identify lessons and learn them,” said Hampton, who replaced Tom McKillop in February.
“Many difficult decisions lie ahead... Chief among these will be the need to achieve the annual cost reduction targets of £2.5 billion that we have set within the next three years,” added the new chairman.
Ahead of Friday’s meeting, UK Financial Investments, which oversees the British government’s bank holdings, said it would vote against Royal Bank of Scotland’s salaries report in protest at Goodwin’s payoff.
UKFI said that while it fully supported current policy at RBS, it would on Friday vote against its past Remuneration Report which includes a pension for Goodwin worth nearly one million dollars a year.
The payoff for Goodwin has sparked a storm of protest in Britain -- and his home has been attacked -- after the government was forced to pour billions of pounds into RBS to save it from collapse last year.
Goodwin, 50, has refused repeated government requests to voluntarily give up part of his pension, insisting that it was properly done and cleared.
“I do understand that many shareholders will wish to vote against or abstain on the advisory vote on the Remuneration Report to register their strong disapproval of the pension arrangements of our former chief executive,” Hampton said on Friday.
“Clearly, this is an issue of significant political and public concern and we all fully understand that. Legal advice is being taken about whether the decision that was reached can be revisited.”
In late March, vandals attacked Goodwin’s home in Edinburgh. Police said Goodwin -- nicknamed “Fred The Shred” for his costcutting reputation -- was not in the property at the time of the attack and no one was injured.
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First Published: Fri, Apr 03 2009. 01 03 PM IST