RBS ‘tried to profit from struggling firms’

Bosses accused of encouraging secret ‘dash for cash’

STAFF at Royal Bank of Scotland were encouraged to squeeze more money from struggling firms under a secret initiative codenamed ‘Project Dash for Cash’. Leaked documents have reignited claims that the statebacked lender deliberately tried to profit from companies that it had vowed to help – sometimes causing them to fold.

They show how staff could boost bonuses by generating more cash from these firms by ratcheting up fees and loan repayments, or seizing their assets on the cheap.

Last night furious MPs said the confidential files proved that the high street giant deliberately bankrupted businesses.

RBS admits letting down some small business customers in the past, but vigorously denied deliberately causing them to fail. But confidential files leaked to the BBC and news website Buzzfeed show how bank staff were encouraged to target struggling firms in ‘Project Dash for Cash’. In the documents bank staff were told they could ‘provoke a default’ when customers had not defaulted on repayments.

More than 12,000 companies were pushed into the bank’s controversial ‘turnaround’ division, the Global Restructuring Group, in the wake of the 2008 financial crisis. Many now claim their firms were destroyed, not helped, by RBS.

MPs said the latest findings support claims by former government business adviser Lawrence Tomlin- son that RBS deliberately ‘killed off’ small firms. They also appear to contradict evidence given by two former GRG executives who repeatedly told MPs in 2014 that the division was ‘not a profit centre’. Derek Sach and Chris Sullivan, who have since left the bank, rejected claims made in the Tomlinson report.

But in the leaked files GRG is said to have made a £1.2billion profit in 2011. RBS now faces a fresh probe by MPs. John Mann, a Labour member of the Treasury committee said: ‘This is the biggest single financial scandal since the banking crisis. Heads need to roll and lots of them.’

But last night RBS pointed out that two reports into the allega- tions, one by law firm Clifford Chance and the other by former Bank of England deputy governor Sir Andrew Large, both found no proof that the bank deliberately pushed firms into default.

It pointed out that RBS lost more than £2billion by lending to smaller customers between 2008 and 2013.

But a spokesman admitted: ‘In the aftermath of the financial crisis we let some of our customers down.’

‘Heads need to roll and lots of them’