Royal Bank Of Scotland Moves Jobs To India To Cut Costs

The Royal Bank of Scotland Group (LON:RBS) plc (NYSE:RBS) is reducing its workforce by almost 443 employees in the U.K. in order to combat rising expenses. This restructuring move is aimed at increasing the bank’s profitability.

The bank will be shifting its team that provides loans to small businesses. The bank plans to move majority of jobs to India in order to lower compensation costs. The jobs that require contact with customers will continue to remain in the U.K., while those not requiring contact will move.

The bank said that it is restructuring to become a smaller organization. Also, it would support the affected employees by redeploying them into new roles.

This is not the first time the bank has shifted jobs from the U.K. to India. Last year, it moved about 400 positions to the country.

Further, change in the customers’ preference of banking from traditional to digital resulted in Royal Bank shutting 158 branches in Mar 2017. This, in turn, led to reduction in positions by almost 362 employees.

The bank stands liable to pay £100M in legal fees and £900M in settlements to shareholders with regard to investors’ allegations of disguising its financial position at the time of capital call during the financial crisis.

However, since its bailout by the government during the crisis, the bank has been making continuous efforts to reduce costs and improve its financial position.

Royal Bank’s shares have gained 17.0% in the last six months, outperforming the 8.8% rally for Zacks categorized Banks - Foreign industry.

Currently, the bank carries a Zacks Rank #2 (Buy).

Some other stocks in the same space worth considering include Bank of N.T. Butterfield & Son LTD (NYSE:NTB) , Credicorp Ltd. (NYSE:BAP) and Banco Macro S.A. (NYSE:BMA) . All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bank of N.T. Butterfield & Son’s earnings estimates were revised upward by 4% for the current year, in the last 60 days. Also, its shares have jumped 4.8%, over the last six months.

Credicorp’s current-year earnings estimates were revised nearly 1% upward, over the last 60 days. Further, bank’s shares have increased 18.6%, in the last six months.

Banco Macro S.A. witnessed a 3.8% upward earnings estimates revision for the current year, in the last 60 days. Moreover, its shares have gained 41.8% in the last six months.

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