RBS accused of pushing small businesses into failure through unfair lending practices
The chief of the Royal Bank of Scotland, Ross Ewan, will face MPs January 30 to answer questions about how the bank has treated small businesses.
Previously unpublished memos show bank staff speaking disparagingly about their clients. RBS has been fending off allegations that it pushed small businesses toward failure, so it could pick up their assets on the cheap.
One such memo, with the subject “Just Hit Budget!” talks about applying high interest rates which can only be reduced if clients signed over a stake in their business or property, the Press Association reported.
One line in the 2009 memo read: “No deal, no way. Missed opportunities will mean missed bonuses.”
In an earlier letter to Treasury Select Committee chairwoman Nicky Morgan, McEwan said this memo was “written by a junior manager who is no longer employed by the bank”.
Another memo read: “Rope: Sometimes you need to let customers hang themselves. You have gained then gained their trust and they know what’s coming when they fail to deliver.”
The other memo disclosed by RBS was written in December 2008, when the Global Restructuring Group was established, and describes its role and intended aims.
This week a backbench business debate is planned over the GRG’s treatment of small and medium enterprises.
But McEwan said the instructions “at no time [formed] part of GRG or RBS policy” and that the language used in the memos was “completely unacceptable.”
The bank has set aside £400 million to tackle complaints and compensation, with £115 million already paid out to small businesses claiming mistreatment through an “automatic refund of complex fees.”
The Financial Conduct Authority is also deciding whether to take further action.
Previously unpublished memos show bank staff speaking disparagingly about their clients. RBS has been fending off allegations that it pushed small businesses toward failure, so it could pick up their assets on the cheap.
One such memo, with the subject “Just Hit Budget!” talks about applying high interest rates which can only be reduced if clients signed over a stake in their business or property, the Press Association reported.
One line in the 2009 memo read: “No deal, no way. Missed opportunities will mean missed bonuses.”
In an earlier letter to Treasury Select Committee chairwoman Nicky Morgan, McEwan said this memo was “written by a junior manager who is no longer employed by the bank”.
Another memo read: “Rope: Sometimes you need to let customers hang themselves. You have gained then gained their trust and they know what’s coming when they fail to deliver.”
The other memo disclosed by RBS was written in December 2008, when the Global Restructuring Group was established, and describes its role and intended aims.
This week a backbench business debate is planned over the GRG’s treatment of small and medium enterprises.
But McEwan said the instructions “at no time [formed] part of GRG or RBS policy” and that the language used in the memos was “completely unacceptable.”
The bank has set aside £400 million to tackle complaints and compensation, with £115 million already paid out to small businesses claiming mistreatment through an “automatic refund of complex fees.”
The Financial Conduct Authority is also deciding whether to take further action.