RBS boss to appear in front of MPs after staff told to let clients hang themselves
“Sometimes you need to let customers hang themselves.”
Royal Bank of Scotland boss Ross McEwan is to be hauled in front of MPs later this month to answer questions on the lender’s treatment of small businesses after yet more damning details of the scandal emerged.
The influential Treasury Select Committee confirmed that Mr McEwan will appear alongside chairman Sir Howard Davies on January 30 for a grilling on the bank’s controversial Global Restructuring Group (GRG).
There is also a backbench business debate planned for Thursday in the House of Commons on the treatment of SMEs by GRG, which has been called for by Labour MP Clive Lewis, who is shadow Treasury minister.
It comes after Mr McEwan was asked by the committee’s chairwoman Nicky Morgan to disclose previously unpublished memos, one of which allegedly reveals that staff were encouraged to extract money from struggling small businesses.
One memo – entitled Just Hit Budget! – which was written in 2009 talks of applying particularly high interest rates, which could then be reduced if customers signed over a stake in their business or property.
In one line, the memo said: “No deal, no way. Missed opportunities will mean missed bonuses.”
Another read: “Rope: Sometimes you need to let customers hang themselves. You have gained then gained their trust and they know what’s coming when they fail to deliver.”
The other memo disclosed by RBS was written in December 2008, when GRG was established, and describes its role and intended aims.
In his letter to Ms Morgan dated January 9, Mr McEwan insisted that the Just Hit Budget! memo was “written by a junior manager who is no longer employed by the bank”.
He added that “at no time did it form part of GRG or RBS policy” and said the language was “completely unacceptable”.
The hearing on January 30 promises to be a fiery exchange as the scandal refuses to die down for RBS.
The state-backed lender has been dogged by allegations that it intentionally pushed small businesses towards failure in the hope of picking up their assets on the cheap.
The Financial Conduct Authority has also said it is investigating whether to take further action after publishing an interim report into GRG following intense political pressure.
RBS has set aside £400 million to tackle complaints and compensation, with £115 million already paid out to small businesses claiming mistreatment through an “automatic refund of complex fees”.