January 27, 2009

Reportedly facing up to £41 billion in subprime losses, and now almost 70 percent government owned, Royal Bank of Scotland continued to cut back this week, announcing cuts at its Irish subsidiaries.

RBSC says it will cut 750 jobs, or about 10 percent of the workforce of Ulster Bank Group, Belfast, and its Dublin-based mortgage subsidiary First Active. Most of job losses (550) will be in the Republic of Ireland and most of First Active's 60 branches there will be closed and absorbed into Ulster Bank.

Although RBS raised about $2.4bn by offloading its stake in Bank of China two weeks ago, the Edinburgh-based bank lost more than 70 percent of its share value last week and the British government increased its stake in RBS to 70 percent.

In Ireland, RBS denied that its heavy subprime losses were the cause of the cuts at Ulster Bank, one of Ireland's top five banks. RBS is seeking the cuts through voluntary redundancies, but banking unions have questioned whether employees would chose to resign in the current crisis.

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