‘I was wrong – RBS unit did destroy struggling firms’: Bank chief makes a staggering U-turn in bruising session with MPs
Daily Mail, 31.01.18
The boss of Royal Bank of Scotland was yesterday forced into a humiliating U-turn after defending a ruthless unit long accused of deliberately wrecking companies it was supposed to save.
In a car crash encounter with MPs, Ross McEwan was quizzed about his claim in 2014 that the bank’s notorious Global Restructuring Group rescued ‘the vast majority’ of firms it worked with.
The 60-year-old, who has been RBS chief executive since 2013, admitted his earlier analysis was wrong after it emerged 80 per cent of small businesses dealt with by GRG went bust or remained in dire straits.
‘When you look at the stats, it is not true. The vast majority is not right,’ McEwan told the Treasury Select Committee.
The New Zealander accepted that RBS ‘didn’t get everything right’ but refused to accept that staff had been ‘insensitive and aggressive’ – drawing a furious response from a Tory MP on the committee.
Citing his own experience as a business owner pursued by GRG in 2009, Dumfries and Galloway MP Alister Jack said: ‘The manager who came to see me was not only aggressive, he was thuggish. He shouted at his assistant, reduced her to tears, and as he left my office and headed down the stairs he was still shouting at her.
‘We complained about his behaviour and next time he came he brought his manager with him and we thought there might be better conduct and his manager was equally aggressive. So don’t tell anyone that you don’t, for a minute, think your staff were not aggressive, please. It’s just offensive.’
And Labour MP John Mann accused RBS of using struggling customers as a ‘cash cow’.
The bruising session came less than two weeks after it emerged that bankers at GRG ordered staff to let struggling customers ‘hang themselves’ in an effort to squeeze out every last penny of profit.
The damning memo, written in 2009, shed fresh light on the cut-throat culture at GRG that saw firms stripped bare by bankers who were meant to save them.
Tony Boorman, managing director of Promontory, the consultancy behind a report into GRG for the City watchdog, said the unit had ‘frankly forgotten’ its aim to help rescue struggling businesses and was instead only interested in profit.
‘The focus was almost entirely on the commercial interests of the bank and in particular the collection of charges from customers,’ he said.
Asked about the memo by MPs, Boorman added: ‘It did speak something around the culture of the bank at that time and we saw other comments on file at various points that were kind of similar in tone and spirit.’
He also accused RBS of being ‘unduly defensive’ during its investigation.
The Financial Conduct Authority last night said it will publish the long-awaited report by Promontory into how small and medium sized companies were treated by GRG – but only after it has gained the consent of the individuals identified.
Appearing alongside McEwan at the Parliamentary hearing, RBS chairman Sir Howard Davies said he was ‘acutely embarrassed’ by the memos written by GRG staff.
‘They are the stuff of which nightmares are made as far as a chairman or a chief executive are concerned,’ he said. ‘It’s quite hard to believe how people could have written in such a way about a customer and about customers. It is absolutely awful.’
McEwan added: ‘Let me be quite clear with the committee: we did not do a good job with these customers. At the time when they were in most need of help this organisation in many, many cases and far too many cases was not there giving them the help they needed.’
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