A leaked Royal Bank of Scotland (RBS) email has revealed the cost-cutting measures the investment banking division of the bank is undertaking, which includes a freeze on all technology spending.
The memo, leaked to the BBC, was sent by Chris Kyle, chief financial officer (CFO) at RBS’s Global Banking and Markets (GBM) business.
He outlined 11 initiatives, addressing first technology spend: “Freeze on hardware and software spend to be implemented for the remainder of the year.
“Direct approval rights to be withdrawn from cost centre users. All hardware and software spend must contain the approval of the relevant ExCo member and Regional CFO so that it can be considered on an exceptional basis. For Global Programmes, a weekly exception process will be implemented.”
The committee appointed to approve spending will comprise GBM CIO Stephen Norman, chief administrative officer in finance Alexis Tobin and the division’s chief operating officer David Shalders.
According to the memo, RBS employees will not get any approvals for new telecoms equipment, such as BlackBerrys and headsets, and the bank wants to cut costs of market data by putting a ban on “new premium terminal spend” for the rest of the year and cancelling non-essential information services.
Furthermore, all contractors and technical specialists will be required to take a “mandatory” two-week vacation from 19 to 30 December 2011.
Staff entertainment budgets have also been pulled for the rest of the year, including subsidies for the end-of-year party.
“As we head into the last quarter, there is a current need to further tighten and minimise the rate of spend on non-staff costs. The cost category governance forum has highlighted areas of opportunity to reduce spend.
“To put this into effect, we need to amend the ability to incur costs at a global and regional level. These changes will limit the ability of the organisation to spend, and impose a higher level of authorisation than currently exists today,” Kyle wrote.