ABN / RBS - Job Cuts

As The Royal Bank of Scotland (RBS) consortium gets ready to claim its ABN AMRO prize, there's lots of talks about mass jobs losses, particularly over at the Dutch firm's wholesale banking operations. But, although 19,000 jobs overall are thought likely to be scrapped between the four banks (ABN, Fortis, RBS and Santander) in the next 12 - 18 months, don't expect a bloodbath - even in investment banking.

Jobs are thought likely to go at the banks' HQ operations (ABN's executive management team are thought not to be long for this world) and, although there will be some forced redundancies, redeployment, natural wastage and voluntary severance will generally be the order of the day. Having said this, ABN staff will clearly be more in the firing line (the Scottish mafia in particular is unlikely to can many of their own). Ominously, however, there will be no forced redundancies in the Netherlands, leaving the Dutch bank's UK staff vulnerable to the chop in the name of cost-savings.

ABN's wholesale banking operations, which RBS will acquire and regards as the jewel in the ABN crown, is also said to have a relatively high cost-income ratio (according to press reports, it's 89% compared to 40% over at RBS's own wholesale unit). So, ABN staff can expect some heads to roll and compensation (ie bonuses) to fall as the more frugal Celts take control (ABN staff have their retention bonuses this year, but better make the most of it, as big bonuses may well be a thing of the past). But the combined wholesale operation will give the larger unit a Top 5 global position, and RBS is now in the corporate and investment banking game to win it. Do not expect mass layoffs at the early stages of the merger process, though, as RBS will be keen to assess its new franchise. Senior management at the wholesale bank are, however, likely to be fairly early casualties. But it could certainly have been worse - there would have been significantly more overlap if Barclays had won out in the battle for ABN. And BarCap would have been much more ruthless in cutting heads.

Reader Comment:

1. 'I find the comment in this article ‘the Scottish mafia in particular is unlikely to can many of their own’ particularly offensive and on the verge of racist.  It tends to rely on a pathetic form of stereotyping which should long be left in the dark ages and would not be referred to should RBS be from any other country'.  

2. 'I happen to be Scottish. I find the previous reader's offence at 'the Scottish mafia in particular is unlikely to can many of their own’ risible. If you work for RBS, you would understand that this is entirely true - given the amount of bozos that happen to be Scottish and employed in top positions, just becuase of their connections with key senior management. How many senior people are left from the Natwest takeover ? I rest my case'.