Banking culture has cost billions says peer

COMPANY shareholders across the UK should be leading the campaign to change bank culture and raise professional standards, Labour peer John McFall has insisted as a think-tank calculated that since 2000 almost £53 billion had been paid out by banks in fines and redress.

The financial think-tank, New City Agenda, has published new data identifying the costs of the top 10 misconduct scandals in the UK’s retail banks.

Since 2000 “poor culture”, it said, had cost the UK’s retail banks and building societies almost £53bn in fines and redress with more than £37bn due to the mis-selling of Payment Protection Insurance to consumers.

The think-tank said the key causes of these scandals included poor quality products, inappropriate staff remuneration schemes and an aggressive sales-based culture.

Misconduct costs, it explained, had had a devastating impact on the profitability of banks and had cost shareholders billions of pounds. Between 2010 and 2014:

Lloyds Banking group paid out over £14bn in retail bank misconduct costs and just £0.5bn in dividends to shareholders and yet had paid £2.1bn in bonuses;

RBS paid out £6.4bn in

l retail banking misconduct costs, had not paid a penny of dividends to shareholders but managed to pay out £3.8bn in bonuses and

If Barclays had not had to pay-out £7.3bn in retail banking misconduct costs, then it could have trebled its dividend to shareholders.

“The profitability of UK retail banks has been imperilled by persistent misconduct and an aggressive sales-based culture,” declared Lord McFall, one of the founders of New City Agenda.