The Royal Bank of Scotland is closing down its FX proprietary trading desk in London, a spokesperson confirms.
In a statement released on Friday (November 24), the bank says: “We can confirm that RBS has closed its FX prop trading desk. We keep the structure of our businesses under constant review to meet the rapidly changing global needs of our customers. As a result of this decision, we will seek to find alternative suitable employment within the organisation for those affected.”
There were six members working on the prop desk including Andy Baxter, head of of the desk.
This year has proven to be a tough one for prop traders trying to make money in an environment of low volatility and a lack of a clear trend. Other banks that have closed desks over the past year include HSBC, which shut down its prop desk in New York, and WestLB London, which wound down its prop trading desk within the fixed income division just months after setting it up.
Earlier this month Deutsche Bank said its third quarter income results were below its numbers due to weaker prop trading, which dragged its equities income down by almost one third.
Ironically enough, the RBS decision comes as FX market volatility is beginning to show signs of increasing with the long-awaited resumption of the US dollar decline. In holiday-thinned trading in New York on Friday, the EUR/USD rose above 1.3100 for the first time since April 2005 as the weight of negative events and announcements finally made their mark. EUR/USD closed in New York just below 1.3100, cable around 1.9320 (having hit a two-year high), USD/CHF just under 1.2100 and even the yen strengthened as USD/JPY closed at 115.75.