Scottish high streets are in line for more bank closures and job cuts after Royal Bank of Scotland (RBS) announced annual losses of £7billion.
RBS chief executive Ross McEwan said yesterday closures were “inevitable” after the Edinburgh-based group suffered its ninth loss-making year on the trot.
Mr McEwan has ordered a four-year cost-cutting drive, aimed at shaving £2billiion off operating costs. Cuts this year are expected to save the group £750million.
“There will be job-losses that we will have to go through to get this business back into shape,” the CEO said, adding: “I will not give job numbers out – I’ll talk to staff first before anyone else.”
In January, bosses at Clydesdale Bank unveiled plans to close 40 branches across Scotland.
RBS, which employs about 80,000 people and in England and Wales operates as NatWest, has already cut back its branch network substantially in recent years in response to tough times for the industry and a trend for customers doing more banking online.
As it continues to struggle with “legacy issues” dating back to before the financial crisis, the state-owned business has notched up losses totalling more than £58billion over the past nine years.
It continues to be hamstrung by fines, restructuring costs and EU rules on state aid.
“The past is not completely behind us,” Mr McEwan said yesterday, adding: “We still have more work to do.
“We are committed to running the bank as a more sustainable and responsible business, serving today’s customers in a way that also helps future generations,
“We no longer have global aspirations and we need to go further still on our operating costs.
“This is a bank that has been on a remarkable journey. We still have further to go.”
Mr McEwan, chief executive since October 2013, also addressed speculation surrounding his own position.
When asked if he expects to be at the bank next year, the New Zealander said: “I hope so. We have done a lot of hard work, and I sense this bank is on the turn.”
RBS’s latest annual report shows he received a pay package worth £3.5million last year, in line with his remuneration in 2015.
The bank highlighted £30billion of gross new mortgage lending across the UK during 2016, while it grew its share in the market for a four consecutive year.
It also said it interacted with customers 20 times more through digital channels than physically, while 35% of all new products were bought online or via mobile phone.
“We’re working to blur the line between traditional and digital banking channels,” Mr McEwan said, adding: “We are investing in a video sales and service proposition that will connect customers, no matter where they are, to the right specialist.
“The bottom-line loss we have reported today is, of course, disappointing but, given the scale of the legacy issues we worked through in 2016, it should not come as a surprise.”
