Bostock named by Cable
RBS accused of ‘largest theft anywhere’
RBS: inflammatory memo (photo by Terry Murden)
Royal Bank of Scotland was accused of “the largest theft anywhere, ever” for the way it treated small business customers.
The claim came from Labour MP Clive Lewis during a debate in the Commons on how the bank’s global restructuring group (GRG) operated.
It followed the emergence of an memo containing inflammatory language on how to deal with business customers. One tip came with a note saying: “Rope. Sometimes you need to let customers hang themselves.”
Mr Lewis told MPs: “We do know that 90% of GRG administered businesses never made it back to mainstream banking. This is a very high proportion.
“The cost of this is immeasurable, but we believe it to be in the tens of billions.
“So let’s be clear here. This is the potential size of the injustice that has taken place in our country.
“If it is this big, it may be the largest theft anywhere, ever.
“And if we begin to take into account the opportunity cost to the economy of business failure and businesses that have been unable to grow, if we begin to include the job losses, homes, the losses of health, relationship and lost taxes, we can see the costs are likely to be immeasurable.”
Between 2008 and 2013 16,000 small businesses were put into GRG and the vast majority of them were liquidated.
“This was meant to be somewhere where they were put back to try to get them into a situation where they would come back as a viable business,” said Mr Lewis.
“Actually, it was more than an intensive care unit, it was more like an abattoir, where they were actually stripped and taken apart.”
Treasury Select Committee chairman Nicky Morgan said the memo, issued after the financial crash in 2009, “lifts the lid on a culture at RBS.”
She added: “When I hear constituents and others say that they will never trust a bank again, they will never ask a bank again for money, then this should be a chilling moment for all banks involved in lending and working with SMEs.”
Liberal Democrat leader Sir Vince Cable, the former Business Secretary, implicated former RBS executive and current Santander chief Nathan Bostock.
“Management knew or should have known that this [was] an intended, co-ordinated strategy, the mistreatment of business customers was a result of that, and that the head of GRG responsible for that policy, Mr Nathan Bostock, is now chief executive of Santander,” he said.
HSBC has agreed to pay $101.1m (£72.7m) to settle a US criminal investigation into rigged currency transactions.
The bank has admitted its traders twice misused confidential information provided to them by clients for its own profit.
HSBC, which is Europe’s biggest bank, saw one of its former bankers convicted last year in connection with the probe.
A US jury found Mark Johnson guilty of defrauding client Cairn Energy in a 2011 currency trade