RBS lending targets ‘promote risk-taking’
ROYAL Bank of Scotland has been accused of pursuing “unrealistic” business lending targets that risk incentivising reckless lending.
The taxpayer-owned bank, which is under intense political pressure to boost support to the economy, has set strict targets for small and mediumsized enterprise lending to its around 800 lending managers, who are each expected to lend close to £2m a year.
Yet Unite says RBS has admitted to the union that only around half are hitting this target, with the rest put into performance management, raising the possibility of redundancy.
This has prompted concerns among staff that the bank is using the regime to cut staff numbers without having to pay voluntary redundancy costs.
In anonymous comments collected by Unite from RBS’S relationship managers, the name given to staff responsible for lending to small companies, staff complained of coming under “almost intolerable” pressure to ramp up lending. The comments were published in a circular sent to Unite members at the bank and were seen by The
Sunday Telegraph. It also alleges sickness levels relating to stress at work had increased, while lending managers often had to put in 50-plus hour weeks “just to tread water”.
Rob Macgregor, national officer for Unite, told The Sunday Telegraph: “The targets that are set are unrealistic. There are too many falling short for this to be an issue of competency.
“There’s a danger the targets encourage dysfunctional behaviour given the threat of disciplinary action. It’s that kind of culture that encouraged misselling in the past and we’re keen to not return to that.”
The union says it first raised concerns about the targets in January 2016. RBS has committed to holding regular meetings with the union on the issues.
The news comes at a sensitive time for RBS, which has come under pressure in recent months for its treatment of struggling firms after the financial crisis.
A spokesman for RBS said: “We are engaging constructively with our employee representatives as we improve our operating model, simplifying processes for the benefit of customers and staff.
“We have a robust framework for assessing the suitability and affordability of our products – making sure that they are right for our customers.
“All our commercial decisions are made on that basis.”