“Recent  announcements by the banks suggest that the process of rationalisation is yet to get into full swing,” said Adams, (right). “However, we remain hopeful that the location of activity by some of the new players in the sector in Scotland will soften the loss of employment from the changes.”

Lloyds Banking Group Plc, which now owns Halifax Bank of Scotland, said this month it plans to cut 5,000 UK. jobs. Royal Band of Scotland also pledged to eliminate more positions. Scotland may also lose a total of 14,000 government-related jobs in the five years through 2014, as part of spending cuts to trim Britain’s record budget deficit, the Item Club said

“Scotland’s unemployment rate among those eligible for benefits has almost doubled since spring last year and there is undoubtedly more pain to come,” Adams said.

Although NatWest was taken over by Royal Bank of Scotland in 2000, the deal soured. 'In the year to June, output in the finance sector shrank by 8.4% compared with 0.8% in the wider UK,' said Adams. 'The picture is just as dismal for business services, also contracting by 8.4% in Scotland and just 6.3% in the UK as a whole.'

Scotland's 20-year dependence on financial services is over. Economic recovery will now rely heavily on its manufacturers and exporters.

The report is a condemnation of the massive changes in Scotland's economy since the mid-'80's when major industrial facilities, as the Linwood car plant and the Ravenscraig steel mill have been closed, with massive cutbacks in mining and shipbuilding. 

But, Adams notes : 'Manufacturing is performing in line with the UK and is expected to be Scotland's fastest-growing area of private sector activity in 2010."

RBOS caps SME lending
The  Royal Bank of Scotland has created a charter for small and medium enterprises (SMEs), which it says will help  around 20 000 start-ups annually in response to claims that banks aren't doing enough to help businesses.

It plans to demonstrate commitment to the key SME market by being the first to offer a cap on fees for arranging overdrafts and loans. Firms with a turnover of up to £25m won't have to pay more than 1.5% of the value of any relevant borrowing facility annually.

It further plans to demonstrate SMEs commitment by including the offer of free transactional banking for start-ups for two years, during which they will not have to pay for services like cheque processing.

As HBOS introduces a £1 levy on daily useage of negotiated overdraft facilities, and £5 on non-negotiated,happily closing its BOS historic accounts, there could be some interesting bank customer churn anticipated.