RBS slammed over ‘disgraceful’ GRG staff memo

Royal Bank of Scotland has come under renewed fire today over the long-running scandal surrounding the conduct of its notorious Global Restructuring Group after The Treasury select committee published an internal memo in which RBS staff are told to let struggling businesses “hang themselves” in the wake of the financial crisis.

The GRG was set up by RBS between 2005 and 2013 and was intended to help businesses facing financial distress but legal action has since been brought against the bailed-out bank by former customers who claim the unit was in fact tasked with driving businesses to the wall with the aim of stripping them of their assets for profit.

The document released this week by the Westminster committee is an internal memo written in 2009, a year after RBS was saved from liquidation by a £45 billion taxpayer bailout.

The author lists a number of tips to leverage fees and make profits out of small businesses.

The 16-page document, entitled “Just Hit Budget!” was released by the bank to MPs yesterday ahead of a hearing today.

The paper includes points like “Rope: Sometimes you just have to let customers hang themselves” and “If they sign, they can’t complain.”

Another tip said: “Avoid round number fees — £5,300 sounds as if you have thought about it, £5k sounds like you haven’t.”

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.”

Conservative MP for Dumfries and Galloway and Treasury committee member Alister Jack said: “At a time when banks had created a financial crisis, they should have been standing foursquare behind customers.

“That memo highlights the disgraceful approach the bank took after getting themselves into difficulty, to then transfer problems on to customers whenever they had the opportunity.”

RBS said it had also passed the document to the FCA as part of its inquiry into the affair, which is still ongoing.

RBS chief executive Ross McEwan, who sent the memo to the TSC, said it had originally circulated among a small group of RBS staff.

Mr McEwan said the memo was written in 2009 by a “junior manager who is no longer employed by the bank”.

In his letter to the committee also published on Wednesday, Mr McEwan said: “The language used in the document was completely inappropriate and the bank does not condone it. It does not reflect bank policy or guidance, either at the time it was written or today.”

However, welcoming the release of the document, RGL Management Ltd, a group of former RBS business customers formed for the purpose of suing the Edinburgh-based bank in respect of the actions of its Global Restructuring Group, said that material in ‘Just hit the budget’ is typical of the experiences that have been seen repeatedly from its members.

James Hayward, CEO of RGL Management Ltd, said: “We welcome the debate in Parliament and call for further investigation into the banks actions.”