Shareholders slam outgoing RBS boss
The outgoing chairman of the Royal Bank of Scotland (RBS) has been heavily criticised by shareholders at his final annual general meeting.
Sir Philip Hampton was lambasted over scandals including local authority loans and the treatment of small businesses, as well as local branch closures.
One shareholder, who is spearheading a damages case against the bank, said Sir Philip was leaving "a terrible legacy" behind.
The chairman said his six years at the head of the bank had been full of ups and downs, but he was sure he was leaving the lender in a stronger position.
The bank's Global Restructuring Group (GRG) is alleged to have pushed small businesses into administration to take control of their assets and sell them at a profit, which RBS denies.
Shareholder Neil Mitchell accused Sir Philip of failing to act on the issue, which he described as "the business PPI".
"GRG has become a massive risk to this bank going forward. After five years of your tenure, it is still a massive reputational risk," he said.
"This is a real issue about culture. You didn't listen to me 2010, in 2012 you pretended, you went through a sham of an investigation.
"The RBS business banking reputation has been trashed."
He added: "It is a terrible legacy you leave behind. I hope that when you leave this bank, that had you taken action five years ago, a lot less damage would have been done to this bank - particularly in business and corporate banking."
Sir Philip said there had been an investigation into GRG, as he refuted claims of "systematic failings".
Shareholders also raised the issue of Lender Option Borrower Option (LOBO) loans to local councils.
Joel Benjamin said: "Rather than help the local government sector get back on its feet, RBS has been finding new and innovative ways of assisting councils to dig their own graves, issuing billions of pounds of toxic loans."
Anthony Barnett said: "As a bank that was bailed out by the tax payer and still largely owned by the tax payer, could you justify how you are charging councils, some of the poorest in the country, on complex and risky loans called LOBOs - some of these rates at more than 7%?"
Sir Philip said: "It is very difficult to talk about specific interest rates. Most business loans, most loans generally in this country, are subject to strong competition."
Trevor Smith, of the Campaign for Ethical Banking, asked about the closure of branches following a pledge by RBS in 2010 to be "the last bank in town".
"Since then the board have broken this promise, closing 150 branches in 2014, of which 93 were the last bank in town and 169 so far in 2015, of which 68 were the last bank in town," he said.
"Given that the public is not only a major stakeholder, but also the majority shareholder too, the bank should pursue and further public interest in all its decision-making."
Sir Philip said: "Since 2010, we have had a 36% decline in the number of people going to our branches...and we have had a something like a 300% explosion in people's use of mobile banking.
"We have said many times, our busiest branch is now the commuter train from Reading to Paddington.
"The scale of change...frankly it surprised us. We can't go on doing the wrong things simply because a few years ago we made the wrong decision."
Earlier, as he opened the meeting in Edinburgh, he said that RBS IT systems needed to improve.
The admission comes after the bank's latest embarrassing IT glitch that saw 600,000 payments fail to go through to customers last week.
The problems affected all four of its banking brands - NatWest, RBS, Ulster Bank and private bank Coutts.
Sir Philip said: ''As last week's processing delays showed, whilst we have invested heavily in rationalising and simplifying our systems and processes, we need to continue to improve overall performance.''
The annual meeting also comes as the Government prepares to begin selling the tax payer's 79% stake in the bank after Chancellor George Osborne announced the plans in his annual Mansion House speech.
Sir Philip said the stake sale would begin in the coming months, but admitted the Government stands to make a loss of about £7 billion if the entire stake is sold off in one go.
He will step down as chairman and will be replaced by Sir Howard Davies, who is currently chairing the Airports Commission, in September.
He said: ''There have been highs and lows along the way, but overall RBS has made great progress since 2009. It has been fundamentally rebuilt - it is now a bank that is much safer in capital strength, in structure and increasingly on behaviour.''