Santander chief led toxic RBS unit that sank small firms

THE boss of Santander was at the heart of a scandal over a ruthless unit accused of wrecking small businesses, Parliament heard yesterday.

Nathan Bostock oversaw a Royal Bank of Scotland division which campaigners claim deliberately destroyed firms and seized their assets, MPs revealed.

As chief executive of Santander UK, he champions entrepreneurs. But Bostock was slammed for his involvement with RBS’s infamous Global Restructuring Group (GRG).

Critics say GRG saddled struggling firms with debts they could not afford to pay and cost scores of business owners their jobs, homes and marriages.

Liberal Democrat leader Sir Vince Cable yesterday used parliamentary privilege to name Bostock as one of those responsible for the disaster, making his role public for the first time.

Cable, who was Business Secretary at the time, referred to a secret report by the City watchdog which said that companies suffered because of GRG’s strategy. He said: ‘The head of GRG responsible for that policy, Mr Nathan Bostock, is now chief executive of Santander.’

The revelation will pile pressure on the Financial Conduct Authority (FCA), which has released a damning summary of GRG failures but refused to publish a report showing who was responsible.

It will also lead to questions over Bostock’s current role, as Santander is bidding for money from a £425m fund to boost competition in business banking, created using money supplied by RBS.

Bostock, 57, joined RBS in 2009, shortly after it was saved from collapse with £46bn of taxpayers’ money. He was responsible for getting rid of £240bn of toxic assets as the bank sought to stabilise, and was the boss of the GRG’s top manager Derek Sach.

A father of two, Bostock was promoted to chief risk officer and then finance boss at RBS before leaving to run Santander in 2014.

He has been repeatedly criticised for fat-cat pay deals, pocketing 1.2m shares worth £463,000 when he moved to RBS, and multi-million pound bonuses as the lender lost billions.

It comes a day after a shocking memo from 2009 revealed that GRG staff were urged to ‘let customers hang themselves’ and chase fees at all costs. Staff were urged to sign customers up for deals ‘they cannot afford’ so penalty costs could be imposed. The memo added that business owners should be pressurised into signing documents as ‘if they sign, they can’t complain’.

RBS says the note was written by a junior manager who no longer works there, was only circulated to three branches and was not official policy.

Bostock, who earned £4.5m in 2016, has been a champion of small business since joining Santander.

Last summer, he wrote an article calling for action to help small companies flourish. ‘The banking sector can provide the solutions, advice and connections small and medium enterprises need to fulfil their potential,’ Bostock said at the time.

Santander is likely to be the biggest beneficiary of a £425m fund to boost business banking operations, launched by RBS as a condition of its bailout.

Labour MP Clive Lewis of Parliament’s group on business banking said the cost of the GRG scandal was immeasurable. ‘It may be the largest theft anywhere, ever,’ he said.

RBS and Santander have declined to comment on Bostock’s involvement.

An FCA spokesman reiterated its previous stance that it is not allowed to publish details of what managers knew without a lengthy, time-consuming legal process.

He said: ‘Any suggestion that the FCA is complicit in any coverup is clearly nonsense.’