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Claims RBS forced firms to collapse

Monday, Nov 25, 2013 - 01:59

Nov 25 - Part-nationalised British lender RBS has been accused of killing off companies by pushing them into its turnaround unit in order to charge higher fees and take control of their assets. As Sonia Legg reports the allegations will further damage the reputation of an already tarnished banking industry.

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The Royal Bank of Scotland has had to deal with its fair share of banking scandals in recent years. But this latest one has really struck a chord. It's been accused of killing off some small companies so the bank can seize their properties at knock down rates. Lawrence Tomlinson carried out an inquiry on behalf of the government. (SOUNDBITE) (English): LAWRENCE TOMLINSON, ENTREPRENEUR IN RESIDENCE AT DEPARTMENT OF BUSINESS, INNOVATION AND SKILLS, SAYING: "We've had a huge amount of complaints about the way businesses have been treated. Some very good businesses going into administration and their assets ending up in their property portfolio. RBS has really been destroying people's businesses and people's lives." By putting companies into their Global Restructuring Group, RBS was able to generate revenue through higher fees and margins. (SOUNDBITE) (English): LAWRENCE TOMLINSON, ENTREPRENEUR IN RESIDENCE AT DEPARTMENT OF BUSINESS, INNOVATION AND SKILLS, SAYING: "The cases we looked at - even if half of them weren't correct - it is still just disgusting what has happened to some of these companies. People who have been ill and have asked for time to restructure their business when their husband is dying have been put into administration straight away." A second independent report by a former Bank of England governor - this one commissioned by the bank itself - has also raised concerns about RBS's treatment of small businesses. BGC's Mike Ingram says the allegations are extremely damaging. (SOUNDBITE) (English): MIKE INGRAM, MARKET COMMENTATOR, BGC PARTNERS, SAYING: "SMEs create nearly 80 percent of the jobs in the UK and investment generally - private sector investment is at record lows - the lowest it has ever been, the lowest since records begun in 1955 - there must be a concern that the reasons this isn't happening is partly because of the banks." RBS is 82% owned by the taxpayer - it was bailed out during the 2008 financial crisis Its chief executive has now appointed a law firm to investigate the allegations. The government wants urgent answers from financial regulators. But it may take more than an investigation to restore the trust of Britain's small businesses.

Claims RBS forced firms to collapse

Monday, Nov 25, 2013 - 01:59

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