An internal memo telling Royal Bank of Scotland staff to let small businesses “hang themselves” has been heavily criticised by MPs and business leaders.
The memo referred to struggling companies as “basket cases” and staff were advised that “missed opportunities will mean missed bonuses”.
The document which was debated by the Commons Treasury Select Committee, was written in 2009 after the financial crash, which saw the Government bail out the bank with £45 billion in taxpayers’ money.
Accusations were made that the bank profited from the collapse of small business clients at a time when companies were suffering the effects of a severe economic downturn.
RBS’ Global Restructuring group were found to be responsible for “widespread inappropriate treatment” of smaller companies, with 92 per cent mistreated in one way or another.
The company was cleared of having deliberately forced firms to go bust to profit from their misfortune.
A spokesman for the GRG Action Group, which represents more than 500 affected businesses, has called for the full publication of the FCA’s report to reveal the full extent of what victims were put through.
He said the memo “provides an alarming insight into the culture at RBS that led to the harrowing treatment of GRG customers”.
He added: “The need to generate fees at all costs pushed staff to deploy devious tactics designed to cause maximum financial hardship to clients.”
Head of Businesscomparison.com, Philip Brennan comments:
“The stress and strain on small business owners resulting from financial hardship can be immense, so this past treatment from an institution that should have been offering support to customers is shocking. Small businesses are at the very heart of our economy, they provide 60 per cent of all private sector employment in the UK and have a combined annual turnover of £1.9 trillion. Attitudes must change and lessons must be learned from this case so that our country’s entrepreneurs are never treated in this way again.”