Royal Bank of Scotland (RBS) chairman Philip Hampton said yesterday that the bank will shed more jobs globally after already axing 2,700 roles in Britain this year, as it looks to recover from the financial crisis.
“In the UK this year so far we have announced around 2,700 posts will go. We can only be honest and say that this will not be the end of the story and more are expected in the UK and internationally in the period ahead,” Hampton said in a speech he was to give at the bank’s annual general meeting later yesterday.
Extracts of the speech were posted on the London Stock Exchange newswire service ahead of the meeting.
The gathering in Edinburgh is expected to be extremely fraught, with shareholders set to vote against a huge payoff to RBS’ disgraced former chief executive Fred Goodwin.
RBS is among the British lenders worst affected by the credit crunch.
It is 70 percent owned by the British government after a massive bailout and posted a loss of more than £24 billion (US$35 billion) last year — the biggest in Britain’s corporate history.
As well shedding billions of pounds in write-offs linked to the collapse of the US housing market, RBS also suffered fallout from its costly and mis-timed takeover of Dutch lender ABN Amro.
“The past is done, we cannot change it. We must recognize what has happened and why, identify lessons and learn them,” said Hampton, who replaced Tom McKillop in February.
“Many difficult decisions lie ahead ... Chief among these will be the need to achieve the annual cost reduction targets of £2.5 billion that we have set within the next three years,” the new chairman said.
Ahead of yesterday’s meeting, UK Financial Investments (UKFI), which oversees the British government’s bank holdings, said it would vote against RBS’ salaries report in protest at Goodwin’s payoff.
UKFI said that while it fully supported current policy at RBS, it would vote against its past Remuneration Report which includes a pension for Goodwin worth nearly US$1 million a year.
The payoff for Goodwin has sparked a storm of protest in Britain — and his home has been attacked — after the government was forced to pour billions of pounds into RBS to save it from collapse last year.
Goodwin, 50, has refused repeated government requests to voluntarily give up part of his pension, insisting that it was properly done and cleared.
“I do understand that many shareholders will wish to vote against or abstain on the advisory vote on the Remuneration Report to register their strong disapproval of the pension arrangements of our former chief executive,” Hampton said yesterday.
“Clearly, this is an issue of significant political and public concern and we all fully understand that. Legal advice is being taken about whether the decision that was reached can be revisited,” he said.
Last month vandals attacked Goodwin’s home in Edinburgh. Police said Goodwin — nicknamed “Fred The Shred” for his costcutting reputation — was not in the property at the time of the attack and no one was injured.