Royal Bank of Scotland said it would speed the breakup of its investment bank after the division’s losses ballooned, and predicted the division would shrink to near-insignificance as early as 2017.
Bloomberg News reports that investment banking 'will not be a particularly significant part of our business' in two to three years, Chief Financial Officer Ewen Stevenson told reporters at a meeting in London Thursday.
CEO Ross McEwan is seeking to return to lender to a full-year profit as the government prepares to sell $39bn of stock in the bank within five years. Britain’s biggest taxpayer-owned lender has been dismantling its investment bank since the financial crisis, when the lender received a state bailout.
Losses at the corporate and institutional bank, which houses the investment bank, widened to $2bn in the second quarter from $39m pounds a year ago, the bank said in a statement Thursday. Operating costs jumped 61%, while litigation and conduct expenses surged more than sevenfold.
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