The Royal Bank of Scotland ran small business customers into the ground in an effort to boost profits.
This is according to leaked documents obtained by Buzzfeed and the BBC, which show a project titled ‘Dash for Cash’. The documents appear to support claims made in a report three years ago suggesting that the bank had targeted troubled small firms, and then bought up their assets cheap.
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‘Dash for cash’ - thousands of small businesses affected
According to the BBC, more than 12,000 businesses were moved into the bank’s turnaround arm, known as the Global Restructuring Group, with the efforts increasing following the financial crash. There, debts were restructured, with interest rates on existing loans increased, or more assets demanded from customers.
In perhaps the most damning claim, the documents appear to show that businesses that were not already in default on loans should be “provoked” into doing so.
How RBS caused one firm to collapse
The BBC spoke to one business owner who claimed that he was mis-sold a product that was intended to hedge against rising interest rates. But, when rates fell, it became a cash drain, leading RBS to revalue his business significantly lower. It then increased its fees, and the business owner claims that this caused his firm to collapse.
Speaking to Newsnight, the bank said: “RBS has been very clear that GRG’s role was to protect the bank’s position.
“In the aftermath of the financial crisis we did not always meet our own high standards and we let some of our SME customers down.
“Since that time, RBS has become a different bank and significant structural and cultural changes have been put in place, including how we deal with customers in financial distress.”
Have you been affected by RBS’s turnaround division? Let us know in the comments.