The Queen’s bank, Coutts & Co., is cutting as much as a tenth of its workforce as it tries to boost its profitability.
The private bank will reduce its total headcount of 1,600 employees by between five and 10 per cent as it cuts the number of client-facing employees.
James Clarry, Coutts’ chief operating officer, told City A.M. the “vast majority” of redundancies would be voluntary, with only a “small percentage” of compulsory lay-offs after a voluntary redundancy register closed last week. The bank will inform staff of its next step in December.
The firm is undergoing a “fundamental shift” in its client-facing strategy, as it tries to boost return on equity, a key measure of profitability for shareholders, from around 10 per cent in the third quarter to more than 12 per cent by 2020, Clarry said.
Coutts, which is owned by Royal Bank of Scotland (RBS), had previously followed a strategy with each client having access to a wealth manager and a private banker, but this will be reduced to a single point of contact.
The reduction in client-facing employees will also allow cuts to the number of support assistants. Assistance to client-facing employees will now be provided centrally.
Some jobs could be transferred to the the broader RBS group, while some new specialist roles, such as staff geared towards taking on new clients, or mortgage specialists, will be created in the new structure, Clarry said.
Clarry said the changes were partly in response to a changing banking landscape as digital technology continues to upend the traditional customer relationship.
However, he added: “Private banks will always maintain a relationship edge.”
Coutts remains “confident” on its financial outlook, Clarry said. He still sees significant demand in the prime property market, above £5m, in which the bank conducts most of its lending.
“The demand is there and that gives us confidence despite the Brexit uncertainty,” he said.
The job cuts come after the blue-blooded private bank, which can trace its heritage on London’s Strand back to 1692, last year appointed former JP Morgan Chase banker Peter Flavel as its new chief executive.
In 2015 Coutts sold its international operation to Swiss bank Union Bancaire Privee as it refocused on its core UK business.
The bank said it will offer support to all employees losing their jobs.
The restructuring was first reported by industry news website Wealth Net.
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