RBS accused of putting viable businesses into default to make a profit

RBS accused of putting viable businesses into default to make a profit

11:54 AM, 25th November 2013, About 11 years ago 7

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Vince Cable, the Business Secretary, has sent a report to City regulators concerning RBS deliberately putting “good viable” businesses into default so it could make more profit.

This is nothing new to the PRS as there have been many reports of banks calling in commercial loans of large portfolio landlords forcing them to sell in some cases.

The allegations are that small businesses are being purposely distressed so that the bank can move them into its Global Restructuring Group (GRG) lending division, which specialises in handling higher risk loans and then potentially seizing their assets all under the excuse of removing bad debt from the bank’s books.

The evidence was compiled by a report by Lawrence Tomlinson a government adviser and is being sent to the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). Mr Cable said “We are pretty confident that the evidence is solid. We want to be absolutely clear that this kind of thing is not going on today.”

“I am, however, confident that the new management of RBS is aware of this history and is determined to turn RBS into a bank that will support the growth of small and medium-sized businesses.”

Mr Tomlinson who is an independent entrepreneur was very shocked by what he found and said “I feel really sick sometimes, it is really disturbing. It is ruining people’s businesses for sure, and in some cases having a huge impact on their personal lives too, even leading to family breakdown.”

RBS have since said that it was already committed to an internal investigation into customer treatment and that it will implement the reports findings in full.

Shockingly the bank is 81% state owned, which means it may have been acting against the interests of the very public that bailed it out of the credit crisis, and has opened itself up to extensive legal action which we will all ultimately pay for.RBS rubish

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Neil Patterson

12:19 PM, 25th November 2013, About 11 years ago

The "can of worms" just keeps on coming since the credit crises.

PPI, Swap Rates, Bank of Ireland, West Brom etc.

It all stems I believe from the change in culture of banks on the 90s from being a service to help customers make money to making money from customers.

I started in banking in 1990 and saw it happen before my very eyes.

Colin Childs

18:40 PM, 25th November 2013, About 11 years ago

Perhaps this was an unintended consequence of Hesters (and his executives team) drive to shrink the size RBS's balance sheet. Why there was never a full investigation of the events leading up to the events of 2008 one wonders..........

11:26 AM, 26th November 2013, About 11 years ago

This whole debacle is really shocking and I am sure there is more to come out about this.

I feel for the small business owners who have been ruined by this. Small businesses are vital to the economic recovery and to see them destroyed by greed makes my blood boil!


12:57 PM, 26th November 2013, About 11 years ago

I cannot help to wonder if an implied fiduciary duty arises here between the bank and those it advises. That duty could prevent additional profits being created by the adviser and certainly secret profits would be unlikely to be permitted.

Such a shame I gave up the study of such relationships 30 years ago. But those presently interested in the topic will be able to advise.

I would be out of financial stock if I had any or I knew what I was doing.

Andrew Stuart

11:08 AM, 27th November 2013, About 11 years ago

re MX
What do members think about this week's news regarding evidence that RBS are calling in business loans in order to liquidate the companies involved assets? Obviously RBS is government owned so isn't it a similar situation to Mortgage express and UKAR?

Ian Ringrose

16:42 PM, 27th November 2013, About 11 years ago

Given that it is claim that MX does this all the time using any pretence they can come up with, I would expect RBS and all other banks owned by the government to do the same.

When you give staff targets, you should not be surprised if they find a way to meat them….

Colin Childs

18:17 PM, 27th November 2013, About 11 years ago

Reply to the comment left by "Andrew Stuart" at "27/11/2013 - 11:08":

There's no indication to the scale of the problem. If there's assets to realise. Then one assumes that there's property involved. As that's where both RBS and HBOS over lent in the boom years.

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