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RBS set to take the axe to its U.S operations

As we’ve noted previously, the phrase “great quarter guys” is perhaps the most common idiom uttered during earnings calls. Equity analysts preface nearly every question with it, even if the quarter wasn’t really all that great. It was said 26 separate times during earnings calls between July 1 and August 15 in 2012, and likely hundreds of times since. One thing we can assure you: no one has opened with that phrase on an RBS call in nearly a decade.

Royal Bank of Scotland on Thursday announced its seventh annual loss in a row. Seven. In a row. Last year’s $5.4 billion (£3.5 billion) plunge pushes total losses over that span to more than 50 billion pounds, or, as Matt Levine notes, “more than 9,000 pounds for every man, woman and child in Scotland.” So, yeah, the state-owned bank is struggling.

Unfortunately, the long-term fix for RBS will focus heavily on the U.S. Chief Executive Ross McEwan said the bank will exit 25 more countries and “substantially reduce” its investment banking operations in the U.S. and in Asia.

Once deemed Royal Bank of Scotland’s ‘Shining Star‘, the firm’s U.S. headquarters in Stamford, Connecticut will be further decimated. More than half of the office’s 2,000 employees will be cut and the location will be reviewed, according to the Wall Street Journal.

RBS’s Stamford office currently boasts one of the world’s largest trading floors, so it would certainly make sense to downsize and move to a cheaper location. RBS and UBS received substantial tax breaks when they opened offices in Stamford, but only with assurances that they would continue to employ thousands of well-paid staffers.

“This is a plan for a smaller, more focused, but ultimately more valuable bank with the vast majority of its assets in the U.K.,” McEwan said.

That’s tough news for RBS employees in Connecticut. Most traders loved the location of the office, nestled just a few miles from the heart of Westchester Country where many bankers reside. Now they’ll likely have to fight for the fleeting number of trading jobs in New York. Or they can hope a hedge fund takes a swing at them.

Why Financial Advisors Are Upset With Obama (eFinancialCareers)

With any government regulation, banks and brokerage firms are worried about unintended consequences and costs associated with additional red tape.

Think Twice About Following Your Boss Out the Door (eFinancialCareers)

Your manager and mentor is quitting to start his own hedge fund and has picked you to move with them. Do you quit the bosom and (relative) security of a large investment bank for a fly-by-the-seat-your-pants start-up in order to secure a ticket to a potentially high-paying buy-side job?

Sands Out at Stan Chart (Business Insider)

Embattled Standard Chartered CEO Peter Sands will step down in June. Former J.P. Morgan exec Bill Winters, who was fired by Jamie Dimon in 2009, will take his place. The move was not unexpected. Standard Chartered has been on a miserable run for the last two years.

Goldman Makes M&A Leadership Changes (WSJ)

Goldman Sachs has topped the M&A league tables since 2011, but that doesn’t mean it’s resting on its laurels. The bank is mixing up its leadership team, naming Michael Carr and Gilberto Pozzi as new co-heads. The unit’s current boss, Gene Sykes, will become co-chariman of M&A. In other people moves, Doug Ketterer, head of strategy at the Morgan Stanley’s wealth management division, is retiring.

RIP (Bloomberg)

What’s more impressive: Irving Kahn commuting to work three days a week in New York City at age 108 or the fact that he actually made money during the Great Depression? The co-founder and chairman of money management firm Kahn Brothers Group died this week at 109. It was an impressive ride.

When Deferrals Are a Great Thing (Bloomberg)

No one likes getting paid in deferred stock, until of course it vests at a fantastic return price. Goldman Sachs employees exercised options worth $2.03 billion in 2014, with more than 96% of the contracts granted as part of 2008 compensation. The stock has more than doubled since that time.

‘Bad Porn’ (Dealbreaker)

If you are the Morgan Stanley employee who leaked the rather embarrassing “Hunger Games” parody video to the press, watch your back. The firm has reportedly launched an internal investigation into the leak. Oh, and the video cost upwards of $100,000 to produce though it (smartly) wasn’t shown to employees because wealth management chief Greg Fleming likened it to “bad porn,” according to one executive.

Buzz Around the Office

Kentucky Fried Coffee (Fortune)

KFC is set to debut edible coffee cups made of cookies and lined with chocolate and edible paper. Still, isn’t the bigger news here that KFC actually serves coffee?

Quote of the Day: “I checked the actuarial tables, and the lowest death rate is among 6-year-olds. So I decided to eat like [one],” – Warren Buffett on his diet

AUTHORBeecher Tuttle US Editor

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