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Royal Bank of Scotland Trims London Securitized Credit Team

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The Royal Bank of Scotland (RBS - Free Report) is making every effort to face the current challenges and not repeat the mistakes made during the 2008 financial crisis. Per a Bloomberg article, the bank is cutting its securitized credit team based in London.

Per people familiar with the matter, the company dismissed one of the asset-backed securities and collateralized loan obligations traders, and four other sales staff.

In February, the Royal Bank of Scotland announced plans to change parent name to NatWest Group plc later in 2020. Also, CEO Alison Rose disclosed undertaking restructuring of the markets business to focus on financial and risk management for corporate and institutional customers.

Also, acting upon the European Banking Authority’s request to suspend capital deployment plans, Royal Bank of Scotland has decided to stop dividend payouts till 2020-end, and also canceled any outstanding ordinary and special dividend payments from the last year.

“RBS has a robust capital and liquidity position and we are focused on ensuring we support our customers and help them to navigate the immediate and longer-term challenges they are facing as a result of Covid-19,” said Rose.

Notably, the company’s peers HSBC Holdings (HSBC - Free Report) and Deutsche Bank (DB - Free Report) kept aside plans to trim 35,000 and 18,000 jobs at the moment. Also, Lloyds Banking Group (LYG - Free Report) paused the lay-off of 780 employees.

Our Take

We expect the company’s diversified business model and sound financial position to help it combat the crisis related to the coronavirus outbreak. Also, investments in innovations and partnerships to build revenue opportunities keep it well-poised for growth.

Shares of Royal Bank of Scotland have lost 46.2% over the past six months compared with 37.3% decline recorded by the industry.

 

 

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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