Shame of the RBS bullies

Explosive secret files show how bailed-out Royal Bank of Scotland bullied, mocked, threatened and ripped off their clients. . . under watch of these three City titans

A SECRET report into a notorious division of RBS has revealed how staff bullied and threatened vulnerable small businesses – less than a year after the bank was bailed out by taxpayers.

The abuses are laid bare in damning detail in an explosive 350-page report that the bank and City regulators tried to suppress.

We can disclose for the first time today chilling descriptions of how the bank mistreated its own customers from the full dossier – which was produced for the Financial Conduct Authority (FCA) and seen by The Mail on Sunday. They include: Mimicry of a foreign customer; An incident in which staff plotted to help themselves to the stock of a bankrupt shop;

An ‘unprofessional culture’ in which customers were seen as ‘opportunities’;

The plundering of small firms for huge and arbitrary fees;

A shocking memo in which staff were urged to let some customers ‘hang themselves’;

A furious row was brewing last week about the study, after MPs gave financial regulators a deadline of Friday to release the findings of the investigation, which began in 2014 and was concluded in 2016.

City watchdogs have been refusing to publish because they say they need to give individuals the right to reply to any criticism, a process that can take years. The Mail on Sunday can reveal today that its contents include multiple accounts of callous behaviour towards businessmen and women.

Innocent firms were treated as prey by opportunistic staff in the bank’s Global Restructuring Group or GRG division, who were schooled by managers to wring them dry for as much as they could in charges.

Those who dared complain were often treated dismissively. A memo advising staff that, ‘Sometimes you need to let customers hang themselves’ was, the report said, ‘widely circulated’ and ‘indicative of an unprofessional culture that set little store by the interests of customers’.

A shorter version of the report has already been published. But the full document contains more than 200 additional pages describing the bank’s self-serving methods.

RBS has refunded about £400 million of fees wrongly levied on firms. It insists it was cleared of the most serious charge levelled against it, namely that it had artificially lined up healthy firms and flung them into GRG so it could seize their assets for itself.

The former top bosses at the lender at the time the abuses are said to have taken place – between 2009 to 2013 – are not personally criticised in the report. But it is a scandal that drags in some of the biggest names in British business, including the erstwhile chairman Sir Philip Hampton and former chief executive Stephen Hester.

Neither man had direct oversight of GRG, and the pair had their hands full keeping the bank from the brink after its £46 billion taxpayer bailout. Both men are highly regarded in the City.

The most senior executive looking after GRG was Nathan Bostock. He i s now chief executive of Santander UK and one of the most important players in UK banking. The man running the division dayto-day was Derek Sach, who now has his own consultancy.

All three men declined to comment. However, their tenures at the bank are set to be raked over this week if, as expected, MPs choose to bypass regulators and publish the report themselves.

Current RBS chief executive Ross McEwan and chairman Howard Davies are also set to be in the crosshairs, with MPs alleging last week that the pair had misled them on what had happened at its turnaround division. The pair deny the charge.

EVEN after they have been rescued by taxpayers from the consequences of their past greed and folly, the big banks still don’t seem to realise they need to mend their ways.

Take this example: small businessmen and women are the vital infantry of our economy. They are the ones who risk everything for enterprise, who borrow to build, who work endless hours, seven days a week. Their courage and dedication produce safe jobs and wealth for huge numbers of people, and keep the whole economy healthy.

So it is shocking, almost beyond belief, to find that a major bank, RBS, has treated such people with contempt, charged them absurd punitive fees made up on the spur of the moment, and mocked their complaints. When their mistreated clients failed (which is hardly surprising with their affairs in such hands), they even divided up their stock among themselves. The average shark has better ethics than these bankers seem to have.

A still-secret report, seen by The Mail on Sunday, has concluded that these bankers bullied, threatened and exploited vulnerable customers. Parts of the devastating study, commissioned three years ago, have been released. But much of it remains unpublished, partly thanks to absurd ‘Maxwellisation’ rules which allow those criticised a privileged right to see what is said about them and object to it.

MPs on the Treasury Select Committee have rightly demanded full publication by the end of the week. But exposure must be followed by justice. Those responsible must be held accountable, so that honest customers can be sure in future that banks are there to help them, not to hinder and mock them.