[Photo:  by Philip Toscano PA]

Senior executives said to think bank has too much staff

Royal Bank of Scotland appears to be preparing to cut more than $1.25 billion of annual operating costs by eliminating jobs and closing branches as it seeks to bolster profitability. The bank’s reorganization program was apparently blown off-course after the Bank of England cut interest rates last year.

While no numbers have been mentioned, an unidentified analyst said that RBS would need to cut 15,000 jobs. David Lock, an analyst at Deutsche Bank, wrote in a note this month that cost cuts would likely need to reach about £1.5 billion to £1.6 billion of expenses.

It’s anticipated RBS will make cuts in administrative roles and look to simplify processes to eliminate the need for as many staff to handle tasks such as opening bank accounts. While RBS will look to cut costs, the lender will also consider investing in upgrading its IT systems to improve efficiency and lower expenses.