Scottish banks could bear the brunt of high street cutbacks

High street banks are likely to dramatically trim back headcount over the next 12 months, according to the Centre for Business and Economics Research (CEBR), and Scottish banks could feel the most pain.

Royal Bank of Scotland is continuing downsize its operations and the completion of the Lloyds-TSB takeover of HBOS just days away, the Times reckons this means banks north of the border are likely to be particularly badly hit by any job losses in the coming months.

Within the financial services sector in the UK as a whole, 34,000 jobs could be lost in 2009, with high street banks taking the brunt of these, according to latest estimates from the CEBR.

However, The Guardian reports a leaked memo to HBOS staff that suggests there would be "no major changes for the vast majority".

The combined entity will employ 140,000 and thousands of jobs are still predicted to go as a result of the takeover. As the deal nears completion, Scotland could see many financial workers look to other parts of the UK for work, reckons Tavish Scott, leader of the Liberal Democrats in Scotland.

"The country faces an exodus of skilled financial workers," he says.

Some market commentators suggest even gloomier prospects for Scotland's banks.

Speaking to Bloomberg about higher lending charges and the need for recapitalisation among UK banks, Roger Nightingale, global strategist at Pointon York suggested at if couple of organisations were to go under it would "solve some of the problems".

Sadly, for the financial services sector north of the border, he singled out HBOS and RBS.

The latest quarterly survey into the financial services sector by CBI and PricewaterhouseCoopers estimates that retail banks and other lenders sacked around 10,000 staff across the UK between October and December last year.