LONDON (Alliance News) - Royal Bank of Scotland Group PLC is on track to save GBP1.00 billion in 2014, as it continues to simplify its structure and make the transition to becoming a UK-focused corporate lender from an international retail and investment banking giant, Chief Executive Ross McEwan told RBS shareholders Wednesday.
The cost savings come alongside plans to take a further GBP4.3 billion out of the RBS cost base by 2017, partly through the disposals of assets such as US retail bank Citizens, which RBS is set to float off next year, and the sale of its Williams & Glyn business, the 314-branch network it is reviving.
In a statement read at the 80% state-owned bank's annual general meeting Wednesday - McEwan's first as CEO - Chairman Philip Hampton said RBS is keeping a close eye on what to do in the case that Scotland votes for independence from the UK in a referendum this September, adding that the risks around the outcome of the vote could affect the bank's credit rating, tax and regulation.
"We maintain a continuous dialogue with the Bank of England, UKFI and the UK government, and the Scottish government on these matters as part of our normal business planning cycle," Hampton told shareholders, referring to UK Financial Investments, the company set up by the UK government to manage its shareholdings in RBS and Lloyds Banking Group PLC.
"If there is a Yes vote, there would be a period of time between the referendum and Scotland actually becoming independent when the UK and Scottish governments would enter negotiations. During this transition period, the Bank of England would be lender of last resort to the banking sector and the UK would be the sovereign domicile for RBS," Hampton added.
The chairman also said that RBS will "inevitably" close more of its branches on the back of branch transactions declining by around 30% since 2011. Over the same period, online and mobile transactions have more than trebled.
RBS shares were Wednesday quoted at 323.90 pence, down 1.1%.