Lender keeps foothold in investment banking with cheaper satellite office.
Royal Bank of Scotland is beefing up its investment banking operations in Poland as part of an effort to cut costs, but will stop short of exiting one of its big business lines.
New chief executive Alison Rose will update investors on her strategy on Friday, with many employees bracing themselves for news of job losses after she said the group needed to make “tough choices” in her first speech to staff.
However, the lender’s NatWest Markets division is advertising more than 40 positions in Warsaw — a more than 10 per cent increase in the office’s current size — and one person close to the group said several London-based bankers had already been replaced by new recruits in the cheaper satellite office in recent months.
The bank is setting up a new market risk team in the Polish capital and is also looking to increase the number of roles in accounting, human resources and compliance, according to recent job advertisements.
It is also searching for several rates specialists as part of the Warsaw recruitment push, even though some analysts had speculated that NWM would jettison its rates trading business after a disastrous third quarter helped drag the parent group to a quarterly loss.
RBS declined to comment.
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RBS has dramatically scaled back its investment bank since the financial crisis and Ms Rose said in December that it would require further “transformation and simplification”.
The business, which a decade ago was signalling global ambitions with the construction of an office in Connecticut that contained the world’s second-largest trading floor, now focuses on providing services for RBS’s core corporate banking clients.
“NWM’s product offering is too broad,” said Claire Kane, analyst at Credit Suisse, but she added that full closure of the rates business was unlikely because the unit provided interest rate swaps for companies issuing debt, a core service for business clients.
Ms Kane suggested NWM could reduce its costs by an additional £300m on top of its existing target, by scaling back its products, services and staff.
The investment bank is currently without a permanent chief executive or chief financial officer. Chris Marks and Richard Place, who occupied the roles, both stepped down in December in one of the first big executive reshuffles announced after Ms Rose took charge of RBS.