Royal Bank of Scotland Group Plc. (RBS: Quote,RBS.L) is planning to cut over 300 more positions in its Investment Banking unit, the lender said in an analyst presentation on Monday. About 3,800 jobs will be eliminated in the division by the end of 2013, compared to the previous target of 3,500.
RBS had said in January that it is implementing some strategic and organizational changes in its investment banking/wholesale business, as significant new pressures have emerged, particularly in wholesale banking arena. As part of the changes, the company announced 3,500 job cuts over three years, split between its UK and non-UK locations.
The lender, in which the British government has over 80 percent stake, said in the presentation that around 3000 employees will leave this year.
Meanwhile, a Bloomberg report said RBS managers condoned and took part in the manipulation of global interest rates, which suggests that more than four people fired by the bank were involved in wrong doing.
The bank had dismissed some employees in February who were said to have tried to manipulate the London interbank offered rates, or Libor. RBS fired Paul White, Andrew Hamilton and Neil Danziger in London and Tan Chi Min was dismissed in Singapore for gross misconduct.
The Libor is the average interest rate that leading banks in London charge when lending to other banks. A global investigation is on to find out whether attempts were made to manipulate Libor, Tibor and Euribor. Tibor and Euribor are the Tokyo and euro interbank offered rates, respectively.
Traders at various banks were reportedly found to be trying to influence the movement of such benchmarks to make a profit from derivatives attached to the rates.
Citing an instant-message conversation by Jezri Mohideen, RBS' head of yen products in Singapore then, to his colleagues in the U.K. in late 2007, the report said they were instructed to lower the lender's submission to the London interbank offered rate that day.
No reason was given for the lower bid and the rate-setter submitted the number Mohideen sought, two people with knowledge of the discussion told Bloomberg.
The report added that Mohideen was not alone in his deed and traders as well as managers of the bank routinely tried to influence the bank's Libor submissions from 2007 to 2010.
RBS.L closed on Monday at 271.50 pence, down 4.30 pence or 1.56 percent, on 8.72 million shares.
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by RTT Staff Writer
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