14th Nov 2014 06:25
LONDON (Alliance News) - British lender The Royal Bank of Scotland Group PLC's securities unit now plans to fully exit its US mortgage trading business, compared to its earlier plan to partly exit the mortgage-trading and distressed-loan trading business, according to media reports on Thursday.
RBS will now reportedly exit mortgage backed-security, commercial real estate, and commercial mortgage-bond sales and trading in the US However, the company will retain its non-mortgage asset backed securities team.
In May, media reports indicated that RBS would 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.
The job cuts came 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-capitalised 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.
At that time, RBS was said to be planning to cut its US mortgage-trading business by two-thirds, while retaining its securitisation and agency mortgage business. The company's US business employs about 2,400 people.
Copyright RTT News/dpa-AFX
Related Shares:
RBS.L