Will insurance be subject to cost-cutting exercise?

Company reveals plans to reduce its costs by £2 billion over the next four years
Will insurance be subject to cost-cutting exercise?
INSURANCE NEWS
By Paul Lucas
25 Feb 2017

These are not exactly the best of times for the Royal Bank of Scotland, Britain’s largest taxpayer-owned bank – and its insurance workers are likely to be more than a touch concerned by the news the company revealed on Friday.

The bank announced that it will be aiming to cut its costs by £2.5 billion during the next four years on the back of a ninth straight annual loss.
Its net loss actually widened in 2016 – from £1.98 billion in 2015 to £6.96 billion in 2016.

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The company, however, has set a target of producing its first profit in a decade in 2018 with chief executive officer Ross McEwan pushing to eliminate operating expenses. The bank, which was once considered a global titan with £2 trillion in assets, was blown off course in its plans to lower its cost-to-income ratio by 50% when the Bank of England reduced interest rates in 2016.

As such, Bloomberg reports that it is now looking at eliminating jobs as part of the £2 billion cost cuts – it has already cut numbers from around 170,000 to less than 80,000 during the last decade.

“There will be job losses that we have to go through,” McEwan said on a call with reporters. RBS will cut operating expenses by removing “people, property, lower technology costs in some areas. It will be across the board.”


Related stories:
RBS may cut 15,000 jobs – reports
Insurance losses rock RBS as it records £2 billion loss

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