In the presentation of their 2014 results at the end of February, RBS announced that they will be dramatically scaling back its corporate and institutional banking network across the world. At the end of last week an RBS spokesperson, gave further details: “In line with the strategy announced in February 2014 to make RBS a smaller, more focused bank, we have announced further changes to our Corporate & Institutional Banking (CIB) operations. These changes will see us become a stronger, safer and more sustainable business, more aligned to the needs of our core customers in the UK and Western Europe.” Other details have emerged, RBS:

• is establishing a business model that focuses on their core corporate and financial institution customers in the UK and Western Europe, and a small number of international customers with strong links into the UK
• will continue to operate on a global basis. They will centre their rates, currencies, credit, debt capital markets and asset-backed products businesses in the UK.
• will have sales and trading operations in Singapore and the US, a sales office in Japan and coverage teams in the Netherlands, France, Germany, Italy, Spain, Sweden, Finland, Denmark and Norway.
• have clarified that the majority of their international network and transaction services from their international platform will be sold or wound down
• will sell or run down operations in 25 countries
• CIB globally has been split into two separate organisations: Go-forward CIB and Capital Resolution (CR), a business to manage the sale or wind down process

RBS conclude that: “The regulatory and macroeconomic environment is becoming more challenging all over the world. We had to take action now to ensure we can generate returns above our cost of capital. The end result in 2018 will be a smaller, safer business that is relevant to our customers and valuable for our shareholders.”

Transition to new providers

For large corporates this is the crunch point, moving to new bank providers takes time, particularly as none of them had much, if any, prior warning or time to prepare. As you would expect RBS’s Capital Resolution group are keen to stress that: “We will honour legal obligations and work with affected customers through a transition to new providers in the coming months.” 

But, already it is apparent that there is a conflict between the time RBS corporate clients feel it will take to move from RBS to a new bank provider, and when RBS would like to stop providing their service(s). Differences of many months are emerging.

Difficulties are also emerging in transitioning from the white labelled services that RBS provide, e.g. users of RBS’s white labelled netting service (from Coprocess) now have to decide how and to whom do they transition to - see Coprocess’s Supplier Page on CTMfile for further details on the options and issues.

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CTMfile take: For corporate clients affected by the RBS withdrawal and alignment in their global transaction services, it is now a race to get the Request For Proposal developed and out to key potential bank providers, and choose the best bank(s) who only have limited capacity to take on new clients. Laggards will have to accept second best.