RBS could slash its investment bank to a third of its current size next year and will reveal profits are down later in the week
RBS could slash its investment bank to a third of its current size in the New Year as it reviews the business under incoming chief executive Alison Rose, sources close to the company say.
The bank is next week expected to reveal profits fell 25 per cent to £720 million in the third quarter as PPI claims surged ahead of the final deadline in August.
Sources told The Mail on Sunday that NatWest Markets faces cuts because its returns are weaker than other divisions.
Shrinking? Sources say RBS is looking to shrink its investment bank
The unit was blamed for billions of pounds of bad debts in the financial crisis. It made huge losses on risky mortgage deals and the taxpayer had to hand over £45.5 billion to bail out the bank.
NatWest Markets made profits of £3.7 billion in 2007, but last year made a loss of £70 million.
A person close to the bank said: ‘The investment bank is now more of a distraction – a side issue and an annoyance. It is already in managed decline.’ The source added that the current review ‘might just be the next phase’.
RBS is thought to want to keep the division alive as a service for its key corporate clients.