The Royal Bank of Scotland may be one of Britain’s most bailed-out banks. But at its American headquarters here in Stamford, Conn., there is hardly a whisper of distress.
The gleaming glass and steel building — planned years before the financial crisis curbed RBS’s sway over the British financial industry — now looms over Interstate 95, a scrappy challenger to another once-swaggering foreign bank, UBS of Switzerland, which put down roots near the same spot more than a decade ago.
With a outdoor terrace, a gym where workers can purchase massages and one of the largest trading floors in the world, the 11-story building would probably stir the ire of British taxpayers already reeling from a government bailout of more than $71 billion at today’s exchange rate. But perhaps luckily for the workers here, those taxpayers are an ocean away.
RBS, in some ways, is the British version of Citigroup or the American International Group , the two financial companies in which the United States government still owns large stakes. A year ago, RBS recorded the largest ever loss for a British company, £24.1 billion ($35 billion at exchange rates at the time). The British government took what is now an 84 percent stake in exchange for the bailout.
Like AIG, the British bank has been the target of many attacks by unhappy taxpayers, including protests during the Group of 20 summit meeting in London in April 2009 and a snowball barrage on some of its workers in London two months earlier that became popular images on the Internet. Last month, the British singer Billy Bragg rallied a crowd in Hyde Park in London to demand that R.B.S halt bonus payments.
And so, five time zones away, executives in RBS’s American outpost are a bit cautious as they give a tour of their new offices, a $500 million building designed in 2006. “It’s very bull market,” said Michael Lyublinsky, co-head of global banking and markets for RBS in the Americas.
RBS traders and investment bankers moved into the new building throughout last year from several offices in Stamford, in Greenwich, Conn., and in New York City. Executives say the company never considered canceling the move in light of the bank’s problems, and they say the building has been a morale booster in tough times.
“It’s been a source of pride and kind of a rallying cry,” said Robert McKillip, the other co-head of global banking and markets in the Americas. “We’ve been through a lot.”
The Stamford office holds RBS’s second-largest trading center, making it akin to the London trading offices of United States banks. Visitors are greeted by receptionists wearing tartan-plaid blazers. Unlike the foreign headquarters of other powerful banks, there is no grand collection of art on display in the entrance. Instead, videos of workers and the bank’s customers flash in the lobby, an electronic testament to the ebb and flow of the monumental business RBS does in global financial markets.
The building’s highlight is an elevator ride away from the entrance. Though RBS combines consumer banking, insurance and trading under one roof, a button pressed for the sixth floor is a voyage to the bank’s true nerve center: a trading floor as immense as an airport hanger. About 900 people work there in space that can hold up to 1,000 traders. In a world where numbers matter, the trading floor was rumored during construction to be larger than UBS’s, currently the world’s largest. RBS’s ultimately came in 3,000 square feet smaller, but bank officials are fond of saying that there is always room for expansion.
On Wall Street, the RBS brand had long been an afterthought because until last year its trading unit used the name Greenwich Capital, which RBS acquired as part of its purchase of another British bank, National Westminster, in 2003. Traders there were not fully integrated into RBS until the move into the new headquarters.
Much of RBS’s growth in recent years has been driven by acquisitions, but the last one caused the bank particular trouble. In 2007, RBS led a hostile takeover of the Dutch bank ABN Amro, for which, as it turns out, it grossly overpaid. Soon, it was saddled with heavy investments in leveraged loans and real estate assets. The bank’s former chief executive, Frederick A. Goodwin, who signed off on the new American building, was pushed out early last year.
Mr. McKillip and Mr. Lyublinsky said the British government’s ownership had not worked against RBS’s business interests, citing the bank’s involvement in helping Kraft Foods take over Cadbury, even though it was a British company. But the bank has been shedding divisions and slimming down as required by the British government, while trying to retain workers. RBS announced on Tuesday that it had sold part of Sempra, a lucrative energy trading unit, to JPMorgan Chase for $1.7 billion.
Recently, the biggest buzz around the new building centered on bonuses, a topic of speculation across Wall Street and a sore spot for the British taxpayers who are helping keep RBS afloat. The bank said a year ago that bonuses would no longer contain cash, a more draconian step than ones taken by most banks, which simply reduced the cash portion of bonuses. Soon after, a spate of traders quit RBS, executives said, saying that the change was an affront to the culture of many who previously had worked entirely on commission for Greenwich Capital.
“It was painful,” said Mr. McKillip. “But the market has come our way in terms of clawbacks and deferrals.”
The bank ultimately decided to allow employees to sell a portion of their stock bonuses this June, alleviating some of the restrictions. Despite proposals to rein in risky banking activity and compensation in the United States, which could add to the list of changes they must make, Mr. McKillip and Mr. Lyublinsky are optimistic about the market and say they are eager to take on the likes of Goldman Sachs and foreign banks like Credit Suisse that did not receive government aid.
Now is the time for the bank to pursue a fresh start, they said. “No other bank was cleaned up more than RBS,” Mr. Lyublinsky said.