28th May 2014 05:32
LONDON (Alliance News) - Royal Bank of Scotland Group PLC plans to cut up to 400 jobs in its US trading business over the next two years as part of the British lender's efforts to reduce its assets ahead of tough new US regulations, according to media reports on Tuesday.
RBS, 80% owned by the British government, is said to be paring its US trading operations and cut between 300 and 400 jobs at its Stamford, Connecticut headquarters so as to reduce costs and refocus on its UK home market.
According to media reports, RBS, whose US business employs about 2,400 people, will partly exit its mortgage-trading and distressed-loan trading business. RBS reportedly plans to cut its US mortgage-trading business by two-thirds. However, the company will continue to retain its securitisation and agency mortgage business.
The job cuts come ahead of new rules planned by the US Federal Reserve that will force foreign banks to bolster their capital cushions and subject themselves to tough stress tests as well as rigorous oversight. The new rules will apply to foreign banks with at least USD50 billion in assets in their US units, which are required to set up separately-capitalized holding companies.
RBS reportedly intends to shrink below the USD50 billion threshold so as to escape the rigorous oversight, instead of adapting to the new regime.
RBS already has plans for an initial public offering of some shares of its US retail business, RBS Citizens Financial Group, later in 2014. The move, amid pressure from British regulators, is part of a broader effort by RBS to bolster its capital in the event of another financial crisis. The bank has said it plans to unload all of RBS Citizens by the end of 2016.
RBS closed Tuesday's trading at USD11.34, up USD0.09 or 0.80% on a volume of 1.52 million shares.
Copyright RTT News/dpa-AFX
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