The ailing banking sector announced a further raft of job losses as two of the men widely held responsible for bringing the sector to its knees apologised for their role in the global financial crisis.
On the day Royal Bank of Scotland – which employs more than a thousand in St Philip’s Place and Brindleyplace in Birmingham – announced more than 2,000 job losses, former chief executive Sir Fred Goodwin was sorry for “all of the distress that has been caused”.
In a bruising encounter with MPs on the Treasury Select Committee, former chief executive of HBOS Andy Hornby, which was bought by rival Lloyds TSB, said he was “extremely sorry for the turn of events” that led to HBOS’s rescue takeover by Lloyds TSB and subsequent government bail-out but did not believe he was “personally culpable” for the crisis.
UBS – which has an office in Colmore Row, Birmingham – also announced plans to cut at least 2,000 more jobs as it unveiled losses of £4.6 billion for the final three months of 2008.
The Swiss giant’s investment banking division will feel the brunt of the cuts.
RBS – now 68 per cent owned by the state – said 2,300 positions would go as part of a restructure of the business, representing about two per cent of the group’s workforce of 106,000.
Alan Dickinson, chief executive of RBS UK, said: “We recognise that any news of this nature is unwelcome at any time.
“It is essential, however, that we consistently review our business to ensure that we are able to operate as efficiently as possible, especially in the economic circumstances.
“We will be consulting with our recognised trade union, Unite, and our employees throughout.
“Everyone at RBS is focused on delivering for our customers and restoring the health of the overall organisation. Staff have given everything they have over the last year.
“We will do everything we can to mitigate the impact on our people and keep job losses and compulsory redundancies to the minimum.”
Derek Simpson, joint leader of Unite, said: “On the day sorry appears to be the easiest word for bosses, 2,300 employees are left paying the price for management mistakes.
“These job losses reflect the reality of the credit crunch, where staff face the ultimate penalty in the form of their jobs, while the senior bankers, who played Monopoly with the money of established finance companies, simply walk away with bumper pay-offs.”
The hearing heard from Paul Moore, HBOS’s former head of regulatory risk, after he was sacked for warning the company was “going too fast”.
“In written evidence, he said that after he was dismissed he took the bank to an industrial tribunal before being paid “substantial damages” but had to agree to a “gagging order” preventing him from speaking.
The decision to dismiss him was taken by then-chief executive, Sir James Crosby – now deputy chairman of the Financial Services Authority.