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RBS could shutter more branches in England, Wales, CEO says


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RBS could shutter more branches in England, Wales, CEO says

Royal Bank of Scotland Group PLC could close more branches in England and Wales due to client transfers from its Williams & Glyn unit, CEO Ross McEwan told LBC Radio on May 11.

The potential closures could result from the transfer of 120,000 small and medium-sized enterprises to rival banks, which is expected to be completed in the next 12 months, after which RBS "will have a very stable network," McEwan said. When asked about the possible level of closures, he said that it would not be clear until "the end of the year to see what actual footfall disappears."

The Williams & Glyn unit, a bank network with more than 300 branches, was initially slated to be divested by RBS but the plan fell through. The network is now being reintegrated into the parent's core banking operations, leading to overlapping branch networks in two of the four countries that make up the U.K.

This follows a plan announced earlier to close 162 branches. The bank blamed overlapping branch networks in England and Wales and an increase in mobile for the closures, which would eliminate 792 jobs.

Over the last four years, branch usage has dropped about 45%, McEwan said. Despite the impending job cuts, the CEO said he is committed to retaining "one of the largest branch networks in the U.K."

He also hinted that RBS may start paying dividends soon: "I'd like to get that dividend going in the next six to 12 months." He added that talks with regulators about the dividends will begin "sooner than later" but that the bank has to be "absolutely stable" in the long term before it can start paying out.

The state-controlled lender reported first-quarter profit attributable to ordinary shareholders of £792 million, up from £259 million in the year-ago period.

Pertaining to his possible exit from RBS, McEwan said his job "is not done yet" and that he has a plan through 2020. He added that he would like to "be around for a little bit longer."

Following RBS' $4.9 billion settlement with the U.S. Justice Department with regard to missold residential mortgage-backed securities, an amount "that hurts," he said his "objective is to get us back focusing on our customers again" and to get the bank "into private ownership."