NatWest Plans Restructuring to Cut Costs Amid Coronavirus Scare

NatWest Group plc NWG, formerly known as Royal Bank of Scotland Group plc (RBS), is likely to slash more than 500 jobs in its retail business, along with a closure of one office, in London, per Reuters. The move comes on the heels of anticipation of rise in loan losses amid the uncertainties due to the coronavirus pandemic.

The company is preparing to slash 550 full-time jobs through a voluntary redundancy program across its branches and premium banking services.

Per a NatWest spokesman, "We have taken the decision to invite applications for voluntary redundancy and will support those colleagues who apply with a comprehensive support package. There will be no compulsory redundancy as a result of this announcement."

The number might rise to about 800, if part-time workers are also included. The bank is also shutting down its Regents House office in London. Notably, the branch was one of the company’s biggest tech hubs and could hold nearly 2,500 workers.

NatWest has been active in terms of cutting jobs amid the pandemic. The company slashed more than 130 jobs from its investment banking arm, NatWest Markets, even though trading improved in volatile markets. These measures are in line with the company’s objective of reducing its costs by about 250 million pounds for the current year. Also, the bank has set aside 3.5-4.5 billion pounds to deal with the expected customer loan defaults.

Shares of this Zacks Rank #2 (Buy) company have depreciated 35.8% over the past year, while its industry has declined 22.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The coronavirus pandemic has compelled a number of banks to consider job cuts in order to brave through the economic slowdown. Among others, Commerzbank AG CRZBY is planning to trim in excess of 7,000 jobs. HSBC Holdings HSBC is likely to slash about 38% of the company’s jobs in its French global banking unit. Moreover, the banking arm of Mitsubishi UFJ Financial Group MUFG intends to reduce its staff by an additional 2,000 jobs by fiscal 2023.

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