At Renegade Inc. we don’t take kindly to bankers who prey on small/medium sized businesses.
Royal Bank of Scotland CEO Ross McEwan and Chairman Sir Howard Davies are apologists for arguably the biggest corporate heist in UK history.
Watching this double act in front of the Treasury Committee on 30 January 2018 was unedifying. To the untrained eye, there were two stuffed suits answering detailed questions about another banking scandal. To the shrewd viewer, there were two corporate types who’d been on the receiving end of hours and hours of legal coaching to defend the indefensible.
The directive was clear: keep telling the committee and the wider world that the Royal Bank of Scotland (RBS) have set up a complaints procedure and people who feel wronged should use it. Translated: possession is nine-tenths of the law – we own the process – we make the rules. Good luck to any individual case needing redress. We’ve even got a retired high court judge to preside – what more do you want?
Using legal firepower is the best strategy these two – and their lawyers – can come up with. In fact, it’s the only strategy now available to them.
So why does all this matter so much? You might think it’s because RBS is majority owned by the British taxpayer but there’s more to it. RBS is an organisation that has been actively undermining the UK economy – for its own gain – for years.
RBS is an organisation that has been actively undermining the UK economy – for its own gain – for years.
Within the bank, there was a division called Global Restructuring Group (GRG) that was meant to turn comprised businesses (who were customers of RBS) around. That was the marketing – the reality was different. GRG became the cash cow of the RBS group by assuming the role of a predatory asset stripper. GRG staff – like all bullies – didn’t go after businesses that could put up a fight they parasitically pursued businesses that are the lifeblood of the UK economy: small to medium-sized enterprises.
Small to medium-sized enterprises (SME) were easy pickings – especially ones with hard assets like real estate. If you have the power to engineer an interest rate rise on a loan that cannot be met real estate can be repossessed. Prior to repossession if you can get a third party to undervalue the asset you buy it at a knockdown price. This, basically, was their business model. How else can you become a cash cow when banking is a cost centre for all businesses and wider society?
So, like with all corporate psychopathy, if something works you rinse and repeat – literally. The number of SME’s that have been rinsed by GRG is staggering. The number of jobs lost is astonishing. The number of families smashed apart is inexcusable. The financial cost is in the billions. The associated suicides are criminal. All for what? All so vampiric bankers could ‘just hit budget’ and release their bonuses.
The problem with all that legal coaching is that McEwan and Davies stuck doggedly to defending a narrowly defined brief. This became an issue when they were quizzed on the wider aspects of the RBS business and were found wanting. If a CEO can’t give you a detailed description of the history of the company he presides over or name the values it stands for – he should ‘do the right thing’ and go. If the Chairman defends him – he should go too.
McEwan is a CEO for our time – cynical, bullying, self-centered and incapable of real service. The long-suffering public are so used to this character they shrug and conclude “so what – that’s the game”. Davies’ checkered past (Gaddafi cash for credentials at the LSE) only serves to confirm most people’s view of the corporate class. But for the sake of our economy and the livelihoods associated the ‘so what’ is misplaced and no, that is not the game.
These people who plunder – without recourse to justice – need to be brought to heel. The rentier capitalism the public endures must be countered with independent regulators who have the national – not the corporate interest – in mind. A damning indictment of the toothless British organisations like the Financial Conduct Authority is that it’s now likely that foreign – not British regulators – will bring RBS to book.
RBS has killed confidence in the UK SME sector. Today – in a post GRG world – when surveyed only nine percent of SME’s would consider going to a bank for lending. Of that percentage, only a third will get any capital. The fallout from this corporate heist is immeasurable and it’s the British people who wear the cost whilst the British taxpayer foots the bill.
The fallout from this corporate heist is immeasurable and it’s the British people who wear the cost whilst the British taxpayer foots the bill.
When straight talking John Mann MP put to McEwan that one of the founders of his business had the words ‘exact integrity’ written on his memorial stone McEwan was at a total loss. Not only did he not know who Thomas Smith was but his demeanor was that of a man who clearly didn’t care a jot about quaint yesteryear business principles like precision and truth. Provided he doesn’t bank with RBS McEwan’s stonemason will have an easy day at the office: RBS & GRG. What an epitaph.
The phrase lions led by donkeys was used by British front-line soldiers in the First World War. They were the brave lions who were sent to their deaths by incompetent and often indifferent leaders.
What a difference six months makes. At the beginning of the year Boris Johnson was talking about the U.K. becoming Singapore-On-Thames.