Royal Bank Of Scotland (RBS) chief executive Ross McEwan has admitted it could take up to 10 years for the bank to restore trust in its reputation after it came joint bottom in a customer satisfaction survey.
His comments came a day after the bank’s chairman, Sir Howard Davies, revealed RBS believes its image is so tarnished that it is considering changing its name.
A long way to go
Mr McEwan said: “We’ve got a long way to go there. It will take another five, maybe even 10 years to rebuild to the level where we would want it to be.
“I have apologised for the behaviour that went on in this organisation between 2008 and 2013. It was just not good enough in dealing with customers. You can have every excuse in the world, but we did not deal with the customers as we should have.
“We were not there supporting them at the time when they absolutely needed us to be doing so and for that, again, I apologise.”
It’s 10 years since the virtual collapse of RBS was one of the triggers for the financial crash which forced the Labour government to pour billions of pounds worth of taxpayers’ money into bailing out the UK banking system to avert a total financial collapse. More than £45 billion went into saving RBS.
But the bank’s troubles didn’t end there. In common with all the other high street banks, it became embroiled in the mis-selling of PPI which has developed into one of the biggest financial scandals the UK has ever seen.
It went on to make £63 billion in further losses over the next decade. Earlier this year it reached a $4.9 billion settlement with the US Department of Justice for its part in the sale of toxic mortgage bonds which were seen as a major contributory factor to the financial crash in America.
It was caught up in the LIBOR rate-rigging scandal, costing more millions in financial penalties from the American judicial system, and there have been thousands of job losses with hundreds of branch closures throughout the country.
More reputational damage came when an investigation by the Financial Conduct Authority (FCA) found the bank’s Global Restructuring Group (GRG) ‘fell well short’ in its treatment of the small business customers it was supposed to be helping back to financial health.
The review found that the unit had systematically mistreated customers, saying: “Many aspects of GRG’s culture, governance and practices were deficient and that in some areas the inappropriate treatment of customers was widespread and systematic”.
However, the bank escaped punishment because the regulator said its powers were ‘strictly limited’ as commercial lending is largely unregulated in the UK.
Mr McEwan said there had been huge changes in the bank’s structure over the last decade.
Just before the financial crash, it was briefly the biggest bank in the world, has embarked on an ambitious string of takeovers. It was making 40% of its profit overseas, which has now shrunk to just 7%.
It has either sold or shut up shop on businesses in 41 countries across the globe and shed 130,000 staff. It’s lending once stood at a staggering £2.2 trillion a year which has now been scaled back to a more modest £748 billion.
in 2018 the bank recorded its first profit in 10 years and is now paying a dividend to its shareholders, but Mr McEwan has acknowledged it is unlikely the British taxpayer will ever receive back the £45.5 billion paid to rescue it from collapse.
The view is shared by Chancellor of the Exchequer Philip Hammond who has announced he intends to return RBS to public ownership, even though the shares may have to be sold at a loss.
“We have to live in the real world and make decisions on the future of our holding in RBS in the best interests of taxpayers”