The banking industry is certainly going through its ups and downs. For the first time in UK corporate history the shareholders of RBS rejected the bank’s pay and pension policy at its annual general meeting. In an overwhelming majority, over 90% of shareholders voted against the policies, among whom were the government who currently own roughly 70% of the organisation. The main area of protest was over Sir Fred Goodwin’s £700,000 a year pension which is publicly held to be unjustifiable considering the scale of the bank’s current losses and eminent restructure which will see many innocent employees lose their jobs. 

To add fuel to the fire, in recent days RBS’ Chairman, Sir Philip Hampton, has announced further job losses in the region of 4,500 in the UK, in addition to the 2,500 that went earlier this year. The jobs cuts have been reported to occur mainly in the operations units of RBS, which is a devastating blow considering the vast majority of these employees will be innocent to the workings of senior management which led to the banks collapse.

In contrast, the UK’s largest bank although not immune is successfully managing to sail through the storm. HSBC has successfully undergone a massive rights issue worth £12 billion (the largest in UK corporate history) showing that the marketplace is still keen on investing in the financial giant. The rights issue has arisen out of a desire to shore up its capital in order to ensure that the organisation weathers the storm and can take advantage of any acquisition opportunities that may arise.

Furthermore, the bank has recently announced a £1 billion fund to help first time buyers gain access to mortgages. The bank looks committed to helping this segment as they lower their loan to value ratio which essentially reduces the deposit that is required to get a good mortgage deal. This will come as a relief for many FTBs and certainly help them in their endeavours to get a mortgage.