29 April 2016
Royal Bank of Scotland chief executive Ross McEwan appeared on LBC for a half-hour phone-in chaired by Nick Ferrari on 20th November last year.
Callers included Ray Perman, former FT journalist and author of Hubris: How HBOS Wrecked The Best Bank In Britain, who asked some powerful questions about regulatory failure in the light of the conclusions of the joint Prudential Regulation Authority and Financial Conduct Authority report into the failure of HBOS, which was finally published the previous day.
Someone suggested I should also call the show to interrogate McEwan on air about certain aspects of RBS’s behaviour, and I did so, becoming the third caller, in a segment that starts at 11 minutes in.
Here’s a transcript of what followed:
Ian Fraser: “Hi Ross . . . I respect what you’re trying to do with RBS, in terms of rebuilding trust, turning around the retail bank, abolishing teaser rates, etcetera, but there are some huge issues which have been surfacing in recent weeks particularly with relation to the alleged falsification, by RBS, of the ‘central files’ you hold on business customers . . . the [documented] allegations basically are that RBS is on a industrial scale falsifying the core files on SME customers, enabling RBS to then win against these customers with whom it is in dispute. . .
Nick Ferrari: ” . . .You’ll stay on the line but I need a question here.”
Fraser: “How concerned are you, Ross, about these very credible allegations of deliberate falsification [by RBS] of customer files?”
Ross McEwan: “Yeah, Ian, can I just push back on this. Because every time I get trapped on this, and people say you know . . . we’ve looked at each of those, and I’m sorry, you keep saying that they were allegations, but that’s what they were. But no-one has proved these things. We’ve looked through these files, I’ve had eight of them across the desk and, I’m sorry, they’re just not true.
Fraser : “I’ve seen the files . . .”
McEwan: “I’m going to push back . . . You show me where it’s gone wrong, and show me what difference it would have made to the actual case that was held and the outcome of that, that’s the piece. Because people . . . there are a number of people are having a go at this bank constantly and I don’t mind facing them face-to-face, we’ve done that, but they’ve got to put it on the table.”
Fraser: “I’d be very happy to meet with you and bring the evidence”
Other callers included Joel Benjamin, a fellow Kiwi, who asked McEwan about Lender Option Borrower Option (Lobo) loans that RBS allegedly mis-sold in industrial quantities to councils. In the process the bank enriched itself whilst impoverishing many local authorities to the extent they’re having to axe jobs and cut services.
I am very grateful to the caller who came on after me, Kyle of Lochalsh-based David Booth – who has compelling evidence that RBS’s GRG unit deliberately wrecked his business and livelihood for profit – for alerting me to the existence of the above video.
Today, in its first quarter results statement, RBS admitted it provided “limited services” to Mossack Fonseca, the dodgy Panamanian law firm and shell company factory at the entre of the ‘Panama Papers’ tax evasion and global money laundering scandal. It also revealed that the Swiss authorities are taking “enforcement action” against its Coutts arm, which is alleged to have played as prominent a role as HSBC Private Bank in aiding and abetting of tax fraud and also appears to be involved in the Malaysian 1MDB debacle.
Overall the bank declared a £968 million loss for the January to March period, up from £459 million last time. The bank, now audited by former Lehman auditors Ernst & Young, largely blamed this on a £1.2 billion payment to the UK government, a payment which gives it the right to resume paying dividends to ordinary shareholders. The so-called Dividend Access Share was put in place as part of the Gordon Brown and Alistair Darling’s flawed £45.5 billion bailout. Overall RBS has lost £52 billion since then. However given the twin swords of Damocles hanging over RBS – the likelihood it will fail to sell 330 Williams & Glyn branches and the humongous forthcoming, and as yet un-provisioned, “conduct and litigation costs” – there is very little chance it will resume paying dividends again soon.
Note: I have regularly appeared on Nick Ferrari’s show, and other LBC shows, as a commentator on the UK banking sector and hope to continue to do so. I did have a meeting with Ross McEwan in December 2015, but our meeting was “off the record” so I’m unable to recount what occurred.