The Hindu Business Line : RBS sounds out employees on severance

Mumbai, Nov. 24 Yet another foreign bank, Royal Bank of Scotland (RBS), has sounded out some of its employees in India about the possibility of a severance. This move comes close on the heels of the reported move by Citi India to reduce its staff here. RBS had earlier announced that it will cut about 2,700 jobs globally to reduce cost in the wake of the credit crisis.

An official, however, said that the global job reduction will have minimum impact in India. There could some job losses but this would be confined to the global banking and markets division which employs around 600 people, he said.

“Like many businesses, RBS has to respond to slowing economic conditions. Job losses will unfortunately be unavoidable in this situation. We consult with our employees and all relevant stakeholders ahead of any specific announcements on jobs as a matter of policy,” said a RBS spokesperson.

It may be recalled that a consortium of RBS, Fortis and Banco Santander had taken over the Dutch bank ABN-Amro in October 2007. The group is awaiting regulatory approval from the Reserve Bank of India to integrate the ABN-Amro business with RBS in India.

With the ABN-Amro acquisition, RBS will become the fourth largest foreign bank in India with a network of 28 branches spread across 21 cities. The group employs around 9,500 people in India.

Citi bailout package

Meanwhile, commenting on the bailout package, the outgoing CEO of Citi, South Asia, Mr Sanjay Nayar, in a statement said, “Today’s announcement brings even greater clarity to our overall financial strength and ability to deliver the best service to our clients. We hope it brings the focus back to the fundamentals of our global franchise.”

“Throughout these difficult markets, Citi India has maintained strong and stable operating income, unparalleled access to funding, extraordinary levels of liquidity and the best talent in the business. Our business is strong and our support for our clients has been unwavering. This announcement sends a strong signal to all our clients here in India about our continued commitment to serve them as we have been doing for more than 106 years,” said Mr Nayar.

The US Government has announced a rescue package for the Citigroup Inc, agreeing to shoulder most of the potential losses arising out of $306 billion of high risk assets.

The Government will also inject $20 billion of new capital, on top of $25 billion it just put into the bank, and receive preferred shares with an 8 per cent dividend. Citigroup received the latest infusion after its shares plunged 60 per cent in the last week, amid worry it lacked enough capital to survive.

Developments at the bank come in the wake of Mr Sanjay Nayar, CEO, Citi, South Asia, deciding to move to Kohlberg, Kravis, Roberts & Co as its first Chief Executive Officer and Country Head for India. Citigroup has appointed Mr Mark Robinson as its new South Asia CEO, who is expected to arrive in India shortly.

Look out for jobs

According to a leading global search firm based in Mumbai, some senior staff from Citi group have been talking to the firm for job possibility. These are people who have been given the alert about the pink slips, said a source in a recruiting firm.

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