Royal Bank of Scotland chief executive Ross McEwan has warned that past misconduct will continue to dog the bank this year despite its culture change initiatives and dividend hopes.
As First Minister Nicola Sturgeon applauded a "symbolic" move by the bank, in turning over the plush executive wing at its Gogarburn headquarters to Scotland's entrepreneurial support network, Mr McEwan admitted that the legacy of the past was "something we have to live with...we know it will be a reasonably noisy year for RBS in conduct and litigation issues".
The bank last week unveiled a £3.5bn operating profit but a £2.2bn charge for past misconduct, and this week hundreds of small businesses in the RBS GRG Business Action Group confirmed a group litigation alleging conspiracy against them by the bank, and several individuals including chairman Sir Philip Hampton, in the operations of the bank's Global Restructuring Group. The Financial Conduct Authority has been investigating the GRG for 15 months.
Mr McEwan commented that the bank would have to "wait and see" what the FCA concluded, but it was "the only area I get emotional about, it strikes at the heart of trust in the bank". He said GRG's client base had rocketed eightfold in the space of three months in the financial crisis, so it had not got everything right, but added : "Did we maliciously go and deal with these customers? I don't recognise this in the organisation I run....every day I meet people who thank us for supporting them."
Ms Sturgeon said the creation of an entrepreneurial hub inside the bank's headquarters was "evidence of a move back to the kind of banking system we should have in Scotland, a system that doesn't just exist for its own sake".
Gordon Merrylees, the bank's head of entrepreneurship, said: "Many staff are saying they felt quite emotional, that sums it up for RBS staff in Scotland."
Last week's figures showed 72 per cent of staff believe RBS to be a great place to work, a fall from 78per cent a year earlier, while staff shareholders, many of whom lost their savings in the crash, await the possible return of a dividend next year at the earliest.
The chief executive of the 80per cent taxpayer-owned bank told staff and VIPs at Gogarburn yesterday that RBS had taken up a key role in creating new jobs for the UK economy. "I want it to support the economy, to work for customers and non-customers", Mr McEwan said.
The wing once lavishly furnished by Fred Goodwin and closed off from the rest of the complex will now house, among the executive offices and boardroom, Entrepreneurial Spark's Edinburgh hatchery for 80 entrepreneurs. It will also offer space to nine support organisations, including Business Gateway, the Prince's Trust, Scottish Edge and Napier University, to create a collaborative start-up advice hub.
Mr McEwan said: "This building was largely closed off to the outside world, now that is changing absolutely dramatically....(to a ) space where RBS staff can learn about the ambitions of entrepreneurs."
Asked later whether the conversion of Mr Goodwin's old stamping-ground, where the former chief executive specified £1000 a roll wallpaper and £100 a yard carpet, represented an atonement for the past, Mr McEwan said: "Our staff want this organisation to be great for the right reasons. It's a milestone for this organisation...and we want staff to make a contribution."
The hatchery, which will open later this year, follows one in Birmingham opened last month, and the bank is now targeting Cardiff, Leeds, Manchester, Bristol and Belfast. Espark was created in Glasgow by Jim Duffy with backers led by Sir Tom Hunter, Lord Willie Haughey and Dr Ann Gloag, and is already the world's largest free entrepreneurial accelerator.
Mr McEwan said: "It's no wonder eSpark businesses have a three-year survival rate of 80 per cent which is world-leading."
On whether the new hubs signified a push by the bank into early-stage company financing, which rose by a third last year to £180m out of overall £10.4billion bank lending, Mr McEwan said: "Not every business is one that is a really bankable proposition but what (eSpark) is doing is taking them through a process...that the bank manager used to do."
A report yesterday claimed as many as 14,000 of the 18,000 jobs in RBS corporate and institutional banking could disappear in the bank's latest slimdown, but Mr McEwan would not be drawn on numbers.
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