RBS AGM 2015 – Our questions asked

June 24, 2015

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Screen shot 2015-06-24 at 09.43.21Move Your Money had two attendees at the RBS AGM in 2015, scrutinising the board via proxy shares kindly facilitated by ShareAction. Here’s the questions we asked in full:

Fionn Travers-Smith, Campaign Manager asked:

“Research from the Community Investment Coalition postcode lending data, which RBS is a contributing member to, shows that 80% of bank lending goes to individuals and SMEs within 3.2 miles of a branch, and that 95% of bank lending goes to within 9 miles of a branch.

Conversely, communities that lack access to bank branches frequently suffer from inadequate access to credit, creating “credit deserts” outside of London, particularly in areas of deprivation or where the last bank in town has closed.

The link between bank branches and financial inclusion is also well recognised. The elderly and disabled are often less willing or able to use digital services, and are much more likely to be excluded from the financial system when their access to branches is diminished.

Equally, exclusion from financial services has been shown to dramatically increase peoples’ cost of living, often for those who can least afford it. Ultimately, exclusion from financial services drives and deepens poverty – a process that branch closures hasten, and worsen.

In 2010 RBS promised “to stay open for business if we are the last bank in town”. Since then the board have broken this promise, closing 150 branches in 2014, of which 93 were the last bank in town, and 169 so far in 2015, of which 68 were the last bank in town, with further closures announced recently.

Given that the public is not only the major stakeholder of RBS, but also its majority shareholder too, the bank should pursue and further the public interest in all its decision-making, including regarding branch closures. We own RBS, so it should work for us.

Given the public interest in keeping branches open, the clear relationship between branch closures and increased financial exclusion and poverty, the essential role that branches play in allocating credit to local economies, and the board’s own promise to retain banking services for communities that not only rely on RBS but also own it too, will the board:

a) Reconsider its policy towards branch closures, by including the public interest in its decision making on this question, and

b) Agree to an immediate moratorium on branch closures, particularly where RBS operates the last bank in town?”

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Joel Benjamin, Campaigner for Move Your Money, asked:

“June 23, date for todays RBS AGM – is also International Public Services Day, and RBS, following the reckless incompetence of bank management is a majority public owned bank, which has left a unique imprint on the British public sector.

Philip, as the individual responsible for the 2005 Hampton Review, resulting in further deregulation of the supine Financial Services Authority, one could argue you bear a degree of personal responsibility for the events of 2008/09 and its continuing aftermath.

Lloyds Bank, from which you departed as Group Finance Director 04/05 was bailed out a few short years later.

Joining RBS in January 2009 following the bailout, your reign as RBS Chairman has coincided with LIBOR rigging, Forex manipulation, PPI mis-selling and the uniquely toxic culture within RBS GRG – described as the “psychopath unit.”

Over this time, whilst continuing to predate upon a weak British economy, we calculate RBS with its £45bn stake of the £1.3trillion bailout, is responsible for 350,000 of the 1 million public sector job cuts imposed by Osborne since 2010, to pay for the bank bailouts.

The equivalent of the entire population of Cardiff, out of work, as a result of the reckless incompetence of your bank.

The local government sector has taken the lions share of austerity cuts, with grant reductions of 40% relative to 2010. Further cuts of up to 60% are signalled by the Chancellor.

Post-bailout, in 2009/10, as a taxpayer owned bank, rather than helping the local government sector get back on its feet, RBS has been finding new and innovative ways to assist councils digging their own graves, issuing billions of pounds of toxic derivative laced loans.

Edinburgh Council, the local municipality within which the bank is HQ is symbolic of the callous contempt shown by RBS to the ailing British state.

Between 2010 and 2011, RBS sold Edinburgh council four “inverse floater” LOBO loans, totalling £40m.

LOBO loans feature initial “teaser rates” to sucker public authorities into the deals. The public sector equivalent of a Wonga loan.

Edinburgh’s “inverse floater” RBS LOBOs are currently costing the council 6.5% interest, at a time when Edinburgh could borrow from the public works loan board at 3% interest. To pay back the LOBOs, originally costing £40m, would cost Edinburgh a staggering £110m as at Jan 2015. That’s £245 for every man, woman and child in the City.

Edinburgh council has just announced a further 1000 job losses, and austerity cuts of £107m. A figure notably similar to the repayment cost of its RBS LOBO portfolio.

RBS acts as if can get away with “mis-selling” without consequence. Mr Hampton should know, he wrote the 2005 Government rule book on deregulation of financial services and enforcement – the “Hampton Principles.”

Mr Hampton, as you depart RBS to join GSK, participating in the asset stripping of a newly privatised NHS, I wonder if your legacy of financial services deregulation, and its consequences for the welfare state gives you cause for reflection?

In todays FT, you claim were it not for £10bn RBS “misconduct” fines since 2008, taxpayers would recover their entire £45bn stake. As Chairman of RBS since 2009, are you not responsible for cleaning up “misconduct”?

RBS shareholders have received no financial benefit from RBS criminality, either in share price inflation, or dividends. Why have you let it continue?

Do you accept any responsibility for the deregulation of financial services, and the wave of criminal mis-selling which has swept the UK, in the decade since the Hampton Review?

Will you allow housing associations and councils, including Edinburgh, to renegotiate one-sided RBS LOBO loans sold under your management, or are you content leaving RBS, with the reputation of a man who drove SME’s and councils into the ground, sullying RBS reputation and destroying client relationships, in order to rescue a toxic bank?”

You can read our full report of the RBS AGM 2015 here. 

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