We messed up, Royal Bank of Scotland chief admits
by business editor Trevor Sturgess
"We've got to stop messing things up," the chairman of Royal
Bank of Scotland has told KentOnline.
Sir Philip Hampton (pictured right) said banks had to
behave a lot better to restore their reputation and regain customer
He was speaking after RBS, which is 82% owned by the taxpayer,
revealed losses of £5.2billion.
These were largely due to fines for LIBOR-rate rigging, the
massive cost of compensating customers who were mis-sold payment
protection insurance (PPI) and money set aside for business
customers wrongly sold interest rate swap products.
He added: "The bank has done bad things - we should never have
run out of money, we should never have committed the LIBOR scandal,
we shouldn't be mis-selling."
Sir Philip was "horrified" that RBS and the other banks were in
such a financial mess and had to be bailed out by the taxpayer. The
bank had to make sure it never happened again.
"We've got to do better things for our customers, we've got to
stop messing things up and over time we will build trust. We have
done bad things and we do deserve a lot of reputational knock, but
most of our customers are pretty happy with what we do."
He did not know how long it would take to restore that
reputation, but it would not be "overnight".
The bank was keen to lend, especially to smaller businesses, but
was "short of lending opportunities".
Weak demand is partly down to the £670bn cash pile that mainly
larger companies are sitting on. Sir Philip said that was why RBS
was focusing on smaller businesses to stimulate loan growth.
But that did not mean relaxing lending criteria. Applicants
should be "credit-worthy" and 90% of applications were approved by
He said RBS aimed to put the bank into a position by 2014
so the government could explore options for selling its stake.
One option is to give shares to every taxpayer, but Sir Philip said
that would be "expensive and difficult to manage".
As for bankers' bonuses, he said some were "too highly paid" in
the investment business and this year's bonus pool had been
Meanwhile, Lloyds Banking Group - around 40% taxpayer-owned
- revealed losses of £570m today, mainly due to the soaring
cost of PPI compensation.