RBS Seeks to Ease Pressure Over Treatment of Small Businesses
Cosumnes Connection, 11.10.16
The GRG witnessed a 400% increase in customers following the crisis.
The policy, known internally in the bank as “dash for cash” meant that staff could enhance their bonuses by seemingly appearing to help firms in debt but working behind the scenes to grab their assets on the cheap and push them further into trouble.
Business owners who fell victim to these practices said the loss of their livelihoods led to family break-ups and deteriorating physical and mental health while others have been made homeless or bankrupted.
RGL Management has now confirmed it will launch the legal action against the bank in early 2017 in litigation it claims will prove to be “disturbing” for the bank and “cast a shadow” over its customer relations.
RBS’s former Deputy Chief Executive Officer Chris Sullivan, who now runs commercial lending operations at Banco Santander’s United Kingdom unit, was criticized by legislators for “willfully obtuse” evidence given to Parliament in 2014 relating to its Global Restructuring Group.
GRG then applied higher interest rates, pressured customers to sell assets to repay loans, took equity stakes in businesses and pushed them into administration.
Britain’s largest lender to businesses is being probed by the U.K.’s Financial Conduct Authority after a government-commissioned report said the bank “artificially” distressed otherwise viable businesses in order to buy their assets at a discount.
Around 16,000 businesses were reportedly put into GRG after the financial crisis, with loans issued by the unit increasing 500 per cent to £65 billion between 2007 and 2012.
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