RBS set to shed jobs after another awful year

After the figures were revealed that the RBS have made a loss of a hefty £794m for the first half of this year compared to a profit of £1.1b in 2010, the CE Stephen Hester has said that job losses were very likely. The global banking and markets which is the investment banking area for investors, could potentially lose several thousand members of staff should the markets not improve drastically.

Mr. Hester said that the business had to seriously consider costs and that any cuts would take place over the next 12-18 months. The share price of RBS collapsed during early trading at the back end of last week, losing almost 20% of their value, and the London Stock Exchange was forced to suspend trading of their shares for 5 minutes. At the end of the day RSB closed at £28.22 down 2.1 or 6.8%.

This suspension came only a day after trading in the shares of Barclays and the Lloyds Banking Group were also halted after their share prices fell more than 10%. This was caused by investors sold out of the UK banks on the back of the rising fears over the impact the Eurozone crisis would have.

The losses the RBS made were in line with many analysts’ expectations, and were largely the result of an £850m provision that had been put aside to compensate customers who had been mis-sold PPI, and also a write down against the banks holding of bonds belonging to the Greek Government which amounted to £733m. The increasing poor trading conditions led the RBS to admit that they were unlikely to hit their ambitious earnings target, unless there was a drastic improvement in business.