RBS 'drove small businesses to the wall'

[DoctorTwo]

According to Lawrence Tomlinson in a report sent to Vince Cable. This is pretty horrific, especially when you consider that SMEs are essential to the economy, probably more so than massive tax avoiding multi-nationals.

Agree, this is a scandal.
We have seen so many scandals and this is yet another one and by a bank that is owned in large part by our own state. What a state we are in!

I know, outrageous. Just when you think all the banking scandals must be exhausted, along comes another one to prove just how poisonous bankers and banks are.

Its bloody scandalous.Intetesting item about it on Jeremy Vine earlier in the week.A real eye opener and totally shocking.

I think there are two sides to every story and these "viable" business were mostly anything but.

I worked for RBS when GRG was created. They have since dispensed of my services so I have no loyalty to them at all but to say that any more than a handful of these business were viable is absolute nonsense. Numerous attempts to rescue them will have been made long before they were transferred and they will have been massively behind with their repayments, usually ignoring attempts by the bank to help them restructure.

Good business with owners willing to listen/work with the bank would not end up in GRG.

But of course no-one wants to hear or believe that and all the business owner who sent their own businesses to the wall by using them to fund extravagant lifestyles when they should have been preparing for a rainy day love the mouth piece the press and Cable give them because it's fashionable to bash the banks.

Like I said, don't work there anymore, not in banking any more and glad to be out of it but the way this is being reported as fact and widespread is outrageous.

That's not what the Department for Business, Innovation and Skills report found, Hehehee. It's interesting to have your point of view, but there must have been considerable wrongdoing to give rise to this report - Tomlinson and BIS weren't just making it up.

Sadly we know banks and bankers have form - terrible form. Scandal after scandal after scandal. I'm prepared to believe there are some decent people in banking but the industry seems to be rotten to the core.

There is a massive political agenda

Fred Goodwin was a wicked man who didn't understand banking beyond chequebooks and screwed up massively. Very many of the other scandals have been built up buy the press and Mr Cable and it doesn't matter what anyone who was actually there has to say no one wants to listen beyond "Sadly we know banks and bankers have form - terrible form"

e.g. I was involved in the "mis-selling" of PPI years ago and I can tell you absolutely categorically that no customer of mine was mis-sold to. In fact there were several who asked for the policy only for me to tell them it was unsuitable for them. Of course there were a few rogue traders who would sell to anyone to meet their targets but it absolutely was not widespread. Doesn't matter though "bankers have form" so every one of them must be a lying cheat and everyone who ever bought a PPI policy is entitled to compensation even though the vast majority bought something that suited their needs brilliantly (and many of them even claimed against it )

That will be the case with this latest "outrage". I am sure there are a handful of business that could have been saved because even bankers are human (really) and make mistakes/have an off day/make a bad judgement call but the vast majority of those businesses wouldn't have been saved on matter how much (taxpayer's) money was pumped into them.

Before people can go public criticizing the banks for not lending to their "viable" business I think they should have to publish their accounts and business plans. I guarantee there are very few that you would want RBS to lend your money to, if you had seen them.

'There is a massive political agenda'

What is the political agenda?

Vince Cable hates bank and bankers - he has admitted as much.

He has regularly come out against the banks and tried to introduce damaging legislation only to have the Chancellor have to reign him in.

It is my prediction that this will disappear once proper politicians get involved (has the PM commented yet?) but of course no-one will remember that it was a fuss about nothing.

I would love to see a journalist ask one of these failed but viable businesses to provide some actual real evidence. Like, I don't know, maybe their balance sheet?

I certainly wouldn't dismiss it out of hand. I never banked with RBS when I had my own business, but I wouldn't think it beyond the bounds of possibility. Hiking up bank charges and reducing overdraft facility are enough in difficult trading conditions to tip a smAll business over the edge. I would think it is not the only banking institution that could be accused of this.

Good point. Vince Cable has criticised irresponsble bankers. I don't think he hates banks and bankers, but he has highlighted problems with banking.

Pharmacy chain forced into liquidation by GRG after being sold interest rate swaps which were, he and many other business owners, supposed to save him money, but what they didn't tell anybody is they'd pay more when interest rates were low.

Not only that, RBS would place a company into GRG for spurious reasons, like not meeting expected turnover by a couple of percentage points. Then once transferred into GRG they're charged exhorbitant fees until they can no longer afford to run and become insolvent. Then the assets are snapped up for pennies and sold on for an easy profit.

The SFO are to investigate.

However, it does sound very serious

Bank of England governor Mark Carney says the latest allegations against Royal Bank of Scotland are deeply worrying, and should be pursued fully by independent authorities.

Asked by the Treasury committee for his views on yesterday's report from Lawrence Tomlinson, which suggested that RBS had deliberately driven healthy firms to the wall, Carney replied:

We take the view that the behaviours documented in the report [and in a separate report from Sir Andrew Large] are deeply troubling and extremely serious.

It is the direct responsibility of the FCA to investigate, Carney continued, saying that RBS can't be left to simply look into it themselves.

Authorities need to be involved, he added.

....

Could RBS could have been forced into cutting healthy firms adrift, as is alleged, because of the pressure to cut its lending book and recapitalise

Mark Carney says this is no defence at all for the kind of "predatory restructuring" that RBS is accused of.

If true, this behaviour is a fundamental violation of banking integrity and the 'banking relationship'.

www.theguardian.com/business/2013/nov/26/bank-of-england-governor-to-face-mps-business-live

RBS finished my husband's small business off.

Thursday afternoon, they agreed an extension to a loan in order to complete 2 houses which were nearly ready to sell.

Monday morning they refused to honour the loan - no explanation given.

Ultimately cost us the business: they foreclosed on the houses and, two years later, sold them at a substantial loss - which they then recovered from us . Nearly cost us our home.

Bastards.

DH has 3 clients who lost homes and businesses to RBS. He is currently hoping for heads to roll up here - loathes the bastards.

Numerous attempts to rescue them will have been made long before they were transferred and they will have been massively behind with their repayments, usually ignoring attempts by the bank to help them restructure

Categorically not the case with DH's clients.

SirCH - nor the case with DH's business. Absolutely not.

Will there be full compensation? Can affected businesses take some sort of American style class action to reclaim damages? Absolutley disgraceful set of affairs.

Do the business owners bear no responsibility?

Interest rate SWAPs are a hedge used to manage interest rate risk. They mean you are protected from interest rises but won't feel the benefit of all interest rate reductions. In the same way that you might buy a fixed rate mortgage - you know you may pay over the odds if rates fall but you take it for the peace of mind of knowing that your costs won't rise.

Again, no-one who ever bought such a thing from me didn't understand that fully but even if I hadn't explained it all properly why would you buy without understanding what you're buying? How can you argue that you have any business acumen if you sign up to something like that without understanding it?

I'll say it again, none of these businesses have ever published their financial information. Can we see it please? Then everyone can make informed decisions as to the viability of these businesses.

Vince has an axe to grind, Nick Clegg wants to prove that he's not biased towards the banks because of his very privileged background - paid for by banking. MPs and journalists love having a sector more "wicked" than they are and which deflects attention from all their wrong doing. Most senior ministers know that we need strong banks and privately support the banking system (which is why most of Cable's plans have come to nothing) but know that they can't do that publicly because it's so unpopular politically.

Of course there will be sad situations where mistakes were made and of course there are some bankers who shouldn't be in the industry (in exactly the same way that there are some teachers/doctors/police officers who should do something else) but this really isn't widespread.

A proper investigation will show that in most cases the business owners were culpable.

there are some bankers who shouldn't be in the industry

You're right. Those who foist these ridiculous schemes on ordinary people who are not made aware of the downfalls. They're called bosses.

but this really isn't widespread.

PPI mis-selling, LIBOR fixing, manipulation of gold and silver prices, The London Whale, credit default swaps, credit default obligations, FOREX manipulation etc etc etc ad nauseam. It seems barely a week goes by without another banking scandal.

If you or I were to steal from a bank we'd go to jail. When a banker steals from us they get a bonus. Something's rotten in the shitty of London, to paraphrase some dead bloke nobody's heard of.

'even if I hadn't explained it all properly why would you buy without understanding what you're buying?'

Because we have been told that banks would refuse to give some loans unless they were sold with an interest swap package.

"How can you argue that you have any business acumen if you sign up to something like that without understanding it?"
It may be a case of mis-selling. These are supposed to be "ethical" institutions, they give to "charities", and they have codes of "ethics". They are not a market trader with a stall on the edge of the street. They have a duty not to pressurise or mis-sell products that can end up ruining the livelihoods of good, hardworking people.

I don't blame the ordinary bank employee, I think soem of these policies may come from the top.

this was the questions asked by an MP of the bank of England boss, Mark Carney

"Could RBS could have been forced into cutting healthy firms adrift, as is alleged, because of the pressure to cut its lending book and recapitalise?"

Let's find the answer to that, and if it is true, who sanctioned it and who allowed it ?

none of these businesses have ever published their financial information

Not true. DH's clients are small to medium sized businesses. All submit their accounts to Companies House as required. RBS shafted them - there was no 'misunderstanding'.

Of course we know there have been lots of scandals, what I mean by saying it's not widespread is that the "scandal" comes about from one or two appalling incidents - they are not widespread. If it was "the banks" or the bosses who led these events then ordinary bankers would be involved because they would have been following bank policy or doing as the boss said. It didn't happen.

SirC - Companies' House info for small business isn't always required and is now so abridged it doesn't tell you anything useful. None of these wronged businessmen who go to the press have ever allowed detailed information to be published.

Over the last 5 years RBS has sacked thousands of staff (like me) Many had been loyal employees for decades and been there since they left school. There is a lot of anger about the way staff have come out of all this. Lots were in pretty senior positions, on good salaries and previously receiving those bonuses. Several lost £1000s (some £100,000s) when the share price collapsed. Not a single one has taken the opportunity to make money by going to the press with horror stories. Why would that be - after all they're all bankers who will do anything to make money? They have nothing to lose/fear if they have a true story about the evil banks and there's money to be made. But no-one has done it.

I can assure you - it's not one or 2 incidents, and while the information is abridged it certainly does not show 3 companies on the brink of financial ruin prior to RBS intervention. DH knows what their financial positions are - without giving too much away.

Please be assured that RBS did not behave properly, and that this is not a couple of isolated incidents.

Adding to sirCh - our company had been successful over a number of years. House building was going through a tricky patch but we had two fantastic, valuable assets (£450,000 and £600,000) to sell - we would have cleared all loans and made a decent profit. IF. We had been allowed a time to complete and sell them. They were eventually sold (by RBS, following foreclosure) for about £300,000 each. Then the bank came after us for the remainder.

We were registered with Companies House, our accounts were open and transparent, our lifestyle was comfortable but by no means lavish, our business was in good order. It was NOT our fault.

, move along. This is a long interview but well worth a watch. Karen Hudes is ignored by most of the media, and for good reason.