Unfestive spirit

14 October 2011 By Margaret Doyle

The lender controlled by the British government is axing investment bank Christmas parties. Combined with other cost savings, this may head off political rancour ahead of a capital hike. Investment bankers may have few options now, but the hit to morale may have a long-run cost.

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RBS is cutting its subsidy for Christmas parties at its investment bank. The news came in a memo from the chief financial officer of the division of the UK state-controlled bank, Chris Kyle.

The move is just one of several cost-saving measures, including: a mandatory two-week holiday for contractors at the end of the year; a ban on internal international travel, and a freeze on hardware and software spending.

RBS’s investment bank saw its operating profit fall from 1.1 billion pounds to 446 million pounds from the first to the second quarter this year.

RBS Chief Executive Stephen Hester said in August that the company was considering cutting 2,000 staff from its investment bank over the following year to 18 months.

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