RBS chief insists his organisation wants to lend more to companies

net lending too. I want my balance sheet to be growing. I think our interests are aligned (with businesses) in that respect.

“The one reason I would be anti a net lending target – I would never give one to my team because they can’t control that number. They can control how much money they lend, but they can’t control how much customers pay back.”

He declared that, in the past three years, customers had been paying back “roughly 50% more than they are contractually supposed to”.

As ke d whet h e r he believed some companies were being too cautious about borrowing, Mr Sullivan replied: “I would be pretty arrogant if I tried to make a pronouncement on someone else’s view of their businesses. They are worried about the stability of the macro factors, eurozone worries ... right now the southern (European) crisis, the fact all the news they see is negative, and doom and gloom so (they) just wait and see for a bit.

“I think there are a lot of people who are beginning to see some green shoots of opportunities. They are on the cusp of ‘I will invest, but maybe j ust see what happens with this’.”

He added: “I think you need a period of no doom for a while, a stable scenario sector as a whole in 2007, he added: “If you look at the lending that was done by banks in 2007 ... if you think about commercial property values being about half the level they were at that point, you have a difficult scenario for people who invested in property and the business models.”

There has been some debate in recent times over whether uncertainty over

Everyone wants to blame banks for the economic crisis ... that’s a bit rich. But we probably lost sight of the rationale for a bank

for a relatively short period (and) I think people will get more confident.”

Asked which sectors were most difficult, Mr Sullivan highlighted property.

He said: “The Ukis pretty unique in terms of its exposure to property of all types, but commercial property (in particular).”

Hi g h l i g h t i n g huge commercial property lending by the UK banking Scotland’s constitutional future, in terms of the independence debate, is having an impact on investment north of the Border.

Asked if he had seen any signs that constitutional uncertainty was having an impact on investment decisions by either indigenous companies or those making inward investment in Scotland, Mr Sullivan replied: “There has been nothing different. I am probably not looking for it. I haven’t seen anything or heard anything. Nobody has mentioned anything to me at all.”

He conceded banks should take some blame for the way they had operated before the financial crisis, but took issue with the f i nger b e i ng p o i nt e d entirely at the sector for the economic turmoil.

Mr Sullivan said: “Everyone wants to blame the banks for the economic crisis. I think that is a bit rich.

“Where I think banks can be criticised is (that), over the last 20 years, we have probably lost sight of the true rationale of a bank existing. We tried to sell products rather than really getting to know the clients and putting good bankers alongside them and giving them the things they need at the right times.”

He declared that he was following an approach of combining “old-fashioned banking” with “some more modern techniques”.