Revealed: RBS memo urges staff to ‘let customers hang themselves’

AN internal memo urging Royal Bank of Scotland workers to “let customers hang themselves” has been published ahead of a parliamentary probe into the institution.

Staff were issued with “tactics” and “tips” on how to leverage earnings from businesses referred to the Edinburgh-based lender’s Global Restructuring Group (GRG), the document shows.

The GRG unit was set up in the aftermath of the bank’s £45 billion bail-out by the UK Government after the financial crash of 2008 and 2009.

Chief executive Ross McEwan released the document, entitled “Just Hit Budget!” in response to a request from Nicky Morgan MP, chairwoman of the Treasury Committee.

It was published ahead of a backbench business debate in the House of Commons on the treatment of the bank’s small and medium-sized enterprises by the GRG today.

The document highlighted aggressive tactics pursued to maximise returns from business customers.

In one bullet point headed “Rope”, the memo advised: “Sometimes you need to let customers hang themselves. You have then gained their trust and they know what’s coming when they fail to deliver.”

One subset refers to “Basket cases”, which are described as “Time consuming but remunerative”, while another sets out a “Deal or no deal?” scenario, which states: “No deal, no way. Missed opportunities will mean missed bonuses. You can always revisit an earlier deal.”

The memo also contains a

list of “16 Ways to generate income”, the first of which outlines the bank’s target to achieve an average of 10 per cent premium on debt (loans).

The memo declares: “They normally cannot afford this and you can then leverage an upside.”

In a letter to Ms Morgan, Mr McEwan said the memo was written in 2009 by a “junior manager who is no longer employed by the bank”.

He added that the memo was circulated within one regional office and had limited distribution in two other GRG offices, stating: “At no time did it form part of GRG or RBS policy.”

Mr McEwan said the bank “proactively” reported the memo to the Financial Conduct Authority.

“For the avoidance of doubt, the language used by in the document was completely unacceptable and the bank does not condone it,” he said.

“It does not reflect bank policy or guidance, either at the time it was written or today.”

Royal Bank has faced accusations that GRG took steps to seize the assets of viable businesses to shore up its battered balance sheet following its bail-out by UK taxpayers.

The bank’s branch closure programme also came in for criticism yesterday.

Ian Blackford, the SNP leader at Westminster, said RBS should be “forced” by the UK Government, as the majority shareholder, to stop the branch closures.

“RBS have to be forced to change[their policy] if they do not do it of their own volition.”

In 13 locations, the loss of RBS will mean there will no longer be a bank in the town, he said.