Royal Bank of Scotland’s tarnished reputation could take another 10 years to recover from its role in the financial crisis and a string of scandals, the lender’s chief executive has warned.
Ross McEwan said that while the bank has managed to regain its financial footing since its £45 billion bailout in 2008 - recording its first annual profit in a decade this year - customers are still distrustful of the once “global titan”.
“There are two things that any financial service organisation has... one is our financial strength and the second is our reputation,” he said.
“And what RBS did 10 years ago, it had lost both of those.
“It got very close to collapse and with that went its financial reputation. And we’ve been hit with reputational issues as a consequence of what happened in the financial crisis, from conduct to litigation issues to GRG (the Global Restructuring Group) to all sorts of issues that over the last 10 years have embroiled this organisation.”
RBS - still 62% owned by the UK taxpayer - earlier this year reached a $4.9 billion (£3.8bn) settlement with the US Department of Justice (DoJ) over the mis-selling of residential mortgage-backed securities between 2005 and 2008.
While RBS has not admitted the allegations by US authorities, documents released by the DoJ show RBS bankers admitted at the time that they were selling “total [expletive] garbage” to investors and made light of destroying the housing market in the lead-up to the financial crisis.
Its now-defunct Global Restructuring Group (GRG) was caught up in a separate scandal, accused pushing firms towards failure in the hope of picking up assets on the cheap, but was let off the hook by the UK regulatory in July.