Royal Bank of Scotland is canceling Christmas for its investment bankers this year as the government-owned lender tries to reduce costs.
The bank will stop subsidising holiday parties and has banned staff entertainment for the rest of the year, Chris Kyle, chief financial officer of RBS’ investment bank, wrote in an e- mail to employees obtained by Bloomberg News. A spokesman for the lender confirmed the contents of the memo.
RBS reduced its spending on holiday parties to $16 a head, enough to buy two pints of lager and a packet of potato chips, after receiving the biggest banking bailout in the world in the financial crisis. The lender announced 2,000 job cuts at the securities unit in August.
The bank is seeking to “further tighten and minimise the rate of spend on non-staff costs,” Kyle wrote. RBS has also frozen spending on computer hardware, new Blackberries and newspaper subscriptions.
“International travel for internal purposes is to cease across all areas” and “travel under four hours duration will be in economy class without exception.”
Employees have also been stopped from organising off-site meetings and from taking taxis home before 10 pm, he said. All contractors will take a “mandatory” vacation from December 19 to 30.
The lender may also have to raise capital as European Union regulators force banks to bolster themselves against losses from the region’s sovereign debt crisis.
RBS might need to raise as much as $26 billion of new capital to pass a third round of stress tests, Credit Suisse Group analysts wrote in a note to clients this week.
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