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RBS under fire over ‘disgraceful’ staff memo

RBS-Building-2012-700x450.jpgThe Treasury select committee has published an internal memo in which staff at Royal Bank of Scotland were told to let struggling businesses “hang themselves” in the wake of the financial crisis.

Staff at the now defunct RBS Global Restructuring Group listed in a document written in 2009 a number of tips to leverage fees and make profits out of small businesses.

The 16-page document, entitled “Just Hit Budget!” has been released by the bank to MPs yesterday ahead of a hearing today.

The GRG was set up by RBS between 2005 and 2013 and was intended to help businesses facing financial distress.

The paper released to MPs includes points like “Rope: Sometimes you just have to let customers hang themselves” and “If they sign, they can’t complain.”

Another tip said: “Avoid round number fees — £5,300 sounds as if you have thought about it, £5k sounds like you haven’t.”

Conservative MP for Dumfries and Galloway and Treasury committee member Alister Jack said: “At a time when banks had created a financial crisis, they should have been standing foursquare behind customers.

“That memo highlights the disgraceful approach the bank took after getting themselves into difficulty, to then transfer problems on to customers whenever they had the opportunity.”

RBS said it had also passed the document to the FCA as part of its inquiry, which is still ongoing. RBS chief executive Ross McEwan, who sent the memo to the TSC, said it had originally circulated among a small group of RBS staff.

In a letter to the committee also published on Wednesday, McEwan said: “The language used in the document was completely inappropriate and the bank does not condone it. It does not reflect bank policy or guidance, either at the time it was written or today.”

McEwan also reiterated that the FCA in November “made clear that, in a significant majority of cases, it was likely RBS’ actions did not result in material financial distress to customers.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Ah, “made clear that, in a significant majority of cases, it was likely RBS’ actions did not result in material financial distress to customers.”, then that’s alright then, ignoring the 20-80 rule, whereby it’s more than likely that at least 20% of those consumers caught up in this farago DID suffer financial distress! bank or Regulator, where’s the difference?

  2. “McEwan also reiterated that the FCA in November “made clear that, in a significant majority of cases, it was likely RBS’ actions did not result in material financial distress to customers.”

    Is there an antonym metric measure for significant? Unimportant is one, meaningless another.

    As this saga continues it will be the attempt to cover up that causes the problem.

  3. This practice was widespread. When you have the opportunity to speak to former RBS staff around the industry they all tell the same story.

    This was a cultural failure that drove inappropriate behaviours, which did happen despite policies that stated the opposite.

    The same with the rights issue months before they went bust. It all smacks of an establishment cover up.

  4. Too many businesses were made to convert overdrafts to loans with the o/d facility subsequently withdrawn removing any flexibility over cashflow. Loans were one or two years maximum. Financial distress not only caused to the business owners but employees too who lost their jobs as a result. RBS and Natwest were both guilty of inflexibility and shortsightedness; others too so I have no sympathy for any of the mainstream banks. Unfortunately no action will be taken given the movement of high level employees from banks to regulator and back again.

  5. The Chartered Institute of Bankers (now known as the London Institute of Bankers) has a Royal Charter.
    Was the signatory a memebr of the Professional Body?
    If so what if any action has the professional body taken over this or do they deem it acceptable?
    If so, perhaps the Queen should consider removing the Charter.

  6. Here is where you will find their code of conduct;
    https://www.libf.ac.uk/members-and-alumni/members/ethics
    And this is the first of their 7 code issues;
    “to act with fairness, integrity and courtesy in all business activities”
    Did that memo do so?
    Who has accepted responsibility for it?
    Who is being held accountable?
    My suspicion is NO ONE

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