RBS “squeezed struggling businesses to boost profits”
The Royal Bank of Scotland (RBS) secretly tried to profit from struggling businesses, a BBC report has revealed.
Leaked documents, exposed by the BBC, show that the bank had purchased assets cheaply from failing businesses it claimed to be helping.
The BBC claims that RBS staff could boost their bonuses by finding firms which could be squeezed in a project titled: “dash for cash”.
The documents, leaked by a whistle-blower, supposedly support three-year-old allegations made by Lawrence Tomlinson, the Government’s former Entrepreneur in Residence.
In 2013, he had accused RBS of “deliberately putting viable businesses on a path to destruction while aiming to pick up their assets on the cheap”.
The documents show that operation “dash for cash” was ramped up during the 2007/8 financial crisis, targeting almost 12,000 struggling companies.
They show that bank staff were rewarded with higher bonuses based on fees collected for “restructuring business customer’s debts”.
Staff were also asked to actively search for businesses eligible for restructuring.
Between 2007 and 2012, the value of loans to customers increased by more than 500 per cent to an estimated £65 billion.
Small business owners involved in the scandal say they have “not only lost their businesses but also experienced family break-ups and deteriorating physical and mental health” due to the way the bank treated them. The BBC report that others have been made homeless or bankrupted.
The bank told the BBC: “RBS has been very clear that GRG’s role was to protect the bank’s position. In the aftermath of the financial crisis we did not always meet our own high standards and we let some of our SME customers down.
“Since that time, RBS has become a different bank and significant structural and cultural changes have been put in place, including how we deal with customers in financial distress.”