LONDON — The Royal Bank of Scotland will announce an £800 million ($1 billion) cost-cutting plan for the year at the end of February, as it prepares to report a ninth consecutive year of losses, according to the Financial Times.
The bulk of the new savings will come from staff cuts in its main offices in London and Edinburgh, and from shutting down high street branches.
RBS, which is 73% state-owned, declined to comment on the FT report but said it “did not recognise” a Sunday Times report that it plans to axe 15,000 jobs this year from its 92,000 global workforce.
Analysts expect the bank to report losses of around £5 billion when it publishes full year results for 2016 on February 24, as its margins continue to be squeezed by record-low interest rates. The bank has already lost a total of over £50 billion since the 2008 financial crisis.
Low interest rates, which Bank of England governor Mark Carney kept at 0.25% at the beginning of the month, damage the bank’s profitability particularly, as it has a surplus of deposits — meaning that the margin between what they can charge for loans and what they pay for deposits is smaller than other banks.
RBS made over £1 billion in savings in 2014 and 2015, and had made £700 million by the end of the third quarter last year.
RBS has not yet responded to a request from comment from Business Insider.
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