By Max Colchester
LONDON-- Royal Bank of Scotland Group PLC is planning to cut
hundreds of jobs in its U.S. trading businesses over the next few
months as it seeks to slim down its operations to prepare for tough
new U.S. regulations, according to people familiar with the
matter.
The cuts, which are set to take place over the next 18 months,
could result in the loss of up to 400 jobs across the U.S.
business, these people said. The bank, 80%-owned by the British
government, is scaling back its trading operations at its Stamford,
Conn., headquarters as part a wider push to cut costs and refocus
on its home U.K. market.
RBS is partly exiting its mortgage-trading business and its
distressed-loan-trading business, these people said. As part of
that, it plans to cut about two- thirds of the jobs in its
asset-backed products business by 2015, these people said. The bank
will continue to focus on its rates, currency and
global-transaction operations, these people said. RBS's U.S.
business employs a total of about 2,400 people.
The bank is scrambling to cut assets in the U.S. ahead of
planned rules that will force foreign banks to thicken their
capital cushions, face yearly stress tests and be subject to
more-rigorous oversight from the Federal Reserve. The
more-stringent capital rules, part of the Dodd-Frank
financial-overhaul law, will apply to foreign banks with at least
$50 billion in assets in their U.S. units. RBS intends to cut about
$10 billion in risk-weighted assets by the beginning of next year
so that it can get below the $50 billion threshold, these people
said.
"As the financial-services industry continues to evolve, so must
RBS's U.S. Corporate & Institutional Banking business," a
spokesman for the bank said. "Our ultimate goals are to enhance our
client focus and connectivity, simplify our operating model,
mitigate risk and reduce cost."
Several foreign banks are bracing for the incoming rules, most
notably Barclays PLC and Deutsche Bank. The British bank recently
presented a plan to cut its global investment banking assets in
half and slice 7,000 investment bank jobs over the next few
years.
Earlier this year RBS announced a plan to cut about GBP5 billion
($8.3 billion) in costs over the next four years and overhaul its
internal operations to better focus on its U.K. retail and
corporate clients. As part of this, RBS has said it would
reconsider relationships with U.S.-centric clients that don't do
business globally.
As it moves away from foreign markets, RBS has accelerated a
move to sell its U.S. retail business, RBS Citizens Financial Group
Inc. RBS is preparing to sell shares of Citizens through an initial
public offering in the second half of 2014. RBS has said it planned
to fully exit from its stake by the end of 2016.
Write to Max Colchester at max.colchester@wsj.com
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