The Royal Bank of Scotland is likely to unveil a "brutal" cost-cutting exercise that may lead to a further 10,000 to 20,000 job cuts as it expects to record losses close to 30 billion pounds, a media report says.
"Royal Bank of Scotland boss Stephen Hester is to unveil a brutal cost-cutting exercise, alongside record losses of close to 30 billion pounds, that are expected to lead to a further 10,000 to 20,000 job cuts," the Sunday Times said.
Hester is finalising details of the plans ahead of the banks announcement of its results next week, which are expected to reveal losses and impairments of 7-8 billion pounds and up to 20 billion pounds in goodwill write-downs related to the ABN deal, the report added.
The bank has already axed 13,000 jobs internationally since last April, including 3,000 in its investment-banking business. Besides, RBS announced 2,300 British job cuts last week, shortly after the bank's former chief executive Sir Fred Goodwin was grilled by the Treasury committee.
The new business plan would lead to hundreds of millions being stripped from the banks global cost base over the next three to five years, the newspaper said.
Besides, the project is also expected to see the bank exit a number of countries in emerging markets, and sell off dozens of businesses now deemed to be non-core, the Sunday Times said.
RBS is considering selling off parts of ABN Amro that it acquired in 2007 as part of a three-way consortium with Spain's Santander and Belgian bank Fortis.
It has already begun talks with the Dutch government, which may acquire certain operations in the Netherlands and parts of the groups international operations.
The report added that "Hester and his advisers remain locked in talks with the Treasury over the governments asset-protection scheme the insurance deal designed to protect the bank from further losses."
Banking sources say the complex structure of the deal means a final agreement may not be ready in time for the banks results. Disagreements over the costs of the scheme and the level of protection offered have bogged down the discussions.
Meanwhile, citing sources close to the bank, The Sunday Times said Johnny Cameron, former head of the group's global banking and markets business, will leave RBS at the end of this month without receiving a pay-off.
