RBS boss opposes calls for nationalisation

Have your say

ROYAL Bank of Scotland has rebuffed speculation over full nationalisation as it revealed a further £310m has been set aside to cover the costs of computer failure and mis-selling scandals.

Reports claim the Coalition government is split over buying back the rest of the taxpayer-backed lender, after RBS’s £45bn bailout in 2008 left the state holding 82 per cent.

“I was hired (to run RBS) as a commercial company and that’s what I think the best answer is,” said chief executive Stephen Hester.

RBS revealed it has set aside £125m to pay for the recent computer failure that affected 17m RBS, NatWest and Ulster Bank customers.

Between April and June RBS also took another £135m hit 
to compensate customers mis-sold payment protection insurance (PPI), taking its total bill for PPI to £1.3bn.

Banks have now set aside close to £10bn to cover mis-sold PPI, with its rival Lloyds making provisions totalling £4.3bn.

RBS also made a £50m provision to compensate small businesses mis-sold complex interest rate swaps – and admitted this could go higher.

Mr Hester said he is determined to “remodel this bank to better serve society”.

“We need to demonstrate the bank has really changed, physically and culturally, from the go-go times pre-crisis,” he said.

While half-year pre-tax losses almost doubled to £1.5bn from £794m a year earlier, Mr Hester insisted the lender is past the worst.

Bad debt writedowns fell 37 per cent year-on-year to £2.6bn.

With politicians keen for 
banks to lend more to stimulate growth, the Government 
is reported to have discussed RBS’s full nationalisation. But Mr Hester said: “We’ve just written off tens of billions of pounds for loans we should not have made.

“If it should be that Government wants loans to be made to a riskier category of borrowers... there’s a cheaper way than buying back all of RBS if you want to make those loans.”

RBS, which employs about 7,000 staff in Yorkshire, said 
its insurance arm, collectively called Direct Line, is on track 
for a stock market float in October.

The lender added its sale of 318 branches to Santander is taking longer than expected.

Comment: Page 16; Direct Line to float: Section 2, Page 18.