Fred The Shred and The Round Topped Filing Cabinets

The Telegraph reports that Fred Goodwin, erstwhile CEO of RBS, was so obsessed with tidiness and so irritated with piles of paper on filing cabinets that he ordered thousands of custom-made round-topped storage units to be rolled out across the bank.

A senior manager told Iain Martin, the author of Making it Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy being published next week.

“Somewhere in a warehouse are thousands of old flat-top RBS filing cabinets that were not Fred-compliant.” 

In pre RBS days as chief executive of Clydesdale Bank, Goodwin apparently interrupted a meeting to take a call from his mother who had seen a cigarette butt left on the steps of the bank’s headquarters in Glasgow. Goodwin immediately arranged to have the butt removed.

Sadly this obsessive attention to detail didn't manifest itself in the more "mundane" activities of the bank such as credit, risk and how much is lent and to whom.

RBS Fined £5.6M

RBS has been fined £5.6M by the Financial Conduct Authority (FCA) for "incorrectly reporting transactions they made in wholesale markets".

Seemingly, between 2007 and 2013, RBS either didn't report or incorrectly reported approximately 45 million transactions!

Banks Retry Debits

Banks, as we all know, love to make money out of their customers' financial cock ups. Therefore it should come as no surprise to learn that banks make around £200M per annum from penalty fees on unpaid items.

Step forward, in the manner of a knight on a plodding donkey, the FCA which has done what the FSA should have done years ago; namely force banks to take full account of the money customers pay into their accounts each day, even if it arrives after direct debits and standing orders have been paid out.

The FCA has decided, quite correctly, that because direct debits tend to be taken from accounts first thing in the morning (before receipts are credited) the banks had stacked the rules of the house in their favour.

Simon Gompertz reports that the UK's seven largest banks, including Barclays, HSBC and RBS, have agreed to operate a retry system in the afternoon, probably between 3pm and 4pm, which takes accounts of new credits, salary payments and cheques which have cleared during the day.

Lloyds Banking Group has also signed up, but is being tardy and claims that it is as yet unable to retry all payments in the afternoon. However, any Lloyds customer who incurs a late payment charge because money hasn't been properly credited will be able to claim a refund (if they remember to).

RBS Sacks 1,400 Staff

The newswires are reporting that RBS has told staff that 1,400 of them will lose their jobs over the coming two years.

Cable Calls For Decision on Fred Goodwin

Vince Cable, the Business Secretary, is less than pleased that action has yet to be taken by Scottish prosecutors against Fred "the shred" Goodwin (the former CEO of RBS) and other senior directors of RBS for their role in its demise.

The Telegraph reports that Cable has written to Lord Wallace, the Government’s chief legal adviser in Scotland, demanding to know when a decision will be made on whether to ban the former bankers from sitting on company boards.

Cable first asked Scotland’s Crown Office and Procurator Fiscal Service to consider prosecutions in January 2012.

The irony being of course, despite Cable's desire for speed, if a decision to prosecute was taken the trial would be lengthy and extremely complex. Any successful prosecution would then be appealed, and the resulting quagmire of appeals and counter appeals/hearings would take years to resolve, not to mention cost a small fortune.

The question that Cable needs to ask himself is will such a lengthy prosecution really serve the public interest?

A cynic might argue that Cable is playing to the gallery.

RBS Systems Crash Again

Up to 17.5 million RBS banking group customers (NatWest, Bank of Ulster and RBS) were left without their money last night as the bank’s systems crashed yet again.

These systems outages are becoming somewhat tiresome!

RBS Reports £5.2BN Loss

RBS, the bank 81% owned by the taxpayer, has reported its fifth year of losses. This year the loss comes in at £5.2BN (the previous year the loss stood at £0.8BN).

Despite the loss, RBS has paid out £679M in bonuses.

RBS has taken a £5BN charge for loan impairments, which are write-offs to cover loans that are unlikely to be repaid. However, with the bank preparing itself for privatisation the size of the provisions and general atmosphere of "clearing the decks" should not come as too much of a surprise. RBS, by getting the bad news out of the way now, will be able to trumpet its achievements and progress when it is ready to return to the private sector.

RBS Does A Deal With The DoJ

The Royal Bank of Scotland (RBS) has done a deal with the US Department of Justice (DoJ) over its involvement in the LIBOR scandal.

Sky reports that RBS' UK subsidiary has signed a two-year deferred prosecution agreement with the DoJ, as part of a package of measures that will include almost £400M in fines.

This means that if RBS commits any form of criminal offence during the two-year period, it could find itself excluded from the US market.

Additionally, 21 RBS employees have either left or have been disciplined as a result of Libor-related misconduct.

John Hourican, head of RBS's investment bank, will step down and forfeit about £4M in deferred share awards despite having had no involvement in or knowledge of the malpractice.

RBS will make a statement on the matter at 13:00 today.

Happy Bonus Season!

As a bleak and gloomy January draws to a close, the banksters are looking forward to awarding themselves some fat bonuses for all their "hard work" last year.

Sadly for the banksters not everyone is happy at the prospect of their self awarded largess. Step forward Unite which has demanded a meeting with UK Financial Investments Ltd (UKFI), which manages the government's (ie the taxpayer's) investments in RBS, Lloyds and UK Asset Resolution, over RBS's expected bonus payout of £250M.

As if things were not already bad enough for RBS, the Wall Street Journal reports US authorities are pushing for a settlement of LIBOR allegations that would result in the bank not only paying a fine of £500M, but also pleading guilty to criminal charges. Barclays and UBS got away with criminal charges, because they co-operated with the authorities.

RBS executives don't want to plead guilty because they fear that it will cause clients to cut off activity with the bank, and that it could increase exposure to ever more litigation.

Maybe then they should hold back on paying out a bonuses this year, lest the money be needed to pay for ongoing litigation?

RBS and NatWest To Refund £10M

It appears that some bank customers when withdrawing cash from an ATM are a tad forgetful and, believe it or not, don't actually take the cash dispensed from the machine.

What happens then?

The ATM sucks the cash back in and recredits the customer's account.

Well that's how most banks treat it, except NatWest and RBS which don't; instead, up until now, they have been crediting a "dump account".

However, that seems set to change as Finextra reports that Royal Bank of Scotland and NatWest have set aside a £10M reserve to refund up to 300,000 customers who made a withdrawal at the ATM but walked away without the cash.

The bank is apparently checking its records over the past seven years and will repay the money, plus the interest earned on the sum, to customers who forgot their cash. 

 

This brings a whole new meaning the phrase "bank error in your favour".

RBS Take PPI Hit

Yesterday I wrote about Lloyds upping its PPI claims provision, today it's the turn of RBS.

Royal Bank of Scotland this morning reported a £1.38BN Q3 loss after taking a £400M provision against the cost of payment protection insurance compensation costs, for good measure it also booked a £1BN charge against the value of its own bonds.

The Telegraph reports that the total amount of money put aside by the bank to pay claims now stands at £1.7BN, having paid out £1BN thusfar.

RBS said that it was possible the cost of PPI compensation could grow further still.

Liborgate

Liborgate, despite the brief interlude provided by the chaff from the DFS over Standard Chartered, rumbles on.

The BBC reports that seven banks (HSBC, Royal Bank of Scotland Barclays, Citigroup, Deutsche Bank, JPMorgan and UBS), are to be questioned in the US for alleged Libor manipulation.

The US authorities will look to see if there is sufficient evidence to support a criminal prosecution.

The coming weeks will see much behind the scenes haggling between the banks, the regulatory authorities and governments, in order to avoid this going to court.

The Stench of Corruption and Greed Overwhelms Britain's Financial Services Industry

Britain's tarnished financial services industry and banking sector seems intent on bringing about its own self destruction. Over the years there has been a litany of scandals eg:

- endowment mis-selling
- subprime mortgages
- PPI mis-selling
- LIBOR fraud
- NatWest computer meltdown
- Northern Rock, RBS etc etc to name but a few

However, it seems that the industry is determined to add to its list of self inflicted shame and dishonour. Step forward the usual suspects ie; Barclays (a familiar name), HSBC, Lloyds and RBS which have all admitted to mis-selling interest rate hedges to small and medium sized business customers.

Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland have all agreed to immediately halt the sale of complex interest rate hedges to smaller businesses and have pledged to compensate potentially thousands of customers who have been screwed by them.

According to the Telegraph the FSA is of the view that about 28,000 businesses had been sold interest rate hedges.

Another nail in the coffin of the tarnished reputation of the UK's financial services industry.

The financial services industry is now fully immersed in its own self created shit, and quite clearly is on the verge of implosion.

NatWest's Death March To Self Destruction II

Day 8 of NatWest's ongoing death march, and NatWest sent the following email to their hapless customers this morning at around 07:48:

"Dear ****,

We know that our current technical issues may still be impacting a number of our customers as we work to clear the backlog.

To make it easier for our customers experiencing difficulties accessing cash we have made the following arrangements. All our current account customers who have an RBS, NatWest or Mint credit card in good order can now:

*	Withdraw up to an additional £100 over their limit on their credit card, with over-limit fees or charges automatically waived or refunded
*	For Cash withdrawals on their card, cash advance fees as well as one month's worth of interest on the transaction will be waived or refunded

For all current account customers we will:

*	Automatically waive or refund overdraft fees and charges on current accounts for customers who have been impacted

We are making these commitments today and there is no requirement for any customer to take further action to benefit from these changes.

We appreciate this has caused an unacceptable level of inconvenience, and to help further we are again extending opening hours in over 900 NatWest branches from 8am until 7pm today.

For further support, please call us on either 0161 931 9959, 08457 77 77 66 or 0800 656 9639. Alternatively, for the latest information and answers to common questions please visit natwest.com

Yours sincerely,


Chris Popple
Managing Director, Retail Banking"

On the NatWest site Stephen Hester (CEO of RBS) is expecting the problems to last all week, as branches are going to remain open longer than normal all week:

"The problems of the past few days have caused disruption and inconvenience for our customers as well as for many customers of other banks. 

I am very sorry for the difficulties people are experiencing. Our customers rely on us day in and day out to get things right, and on this occasion we have let them down. This should not have happened.

Right now my top priority, and the priority of the entire RBS Group, is to fix these problems and put things right for our customers. 

This is taking time, but I want to reassure people that we are working around the clock to resolve these problems as quickly as we are able.

I also want to be clear that where our customers are facing hardship or difficulty we can and will help them. Our staff have already helped thousands of customers to access cash and we will continue to provide this service on a 24 hour basis while we work to resolve the problems. 

I also want to reassure customers that no one will be left permanently out of pocket as a result of this, and again, they should contact us directly about this.

We have doubled the usual number of staff in our call centres, and for the first time ever we will open 1,200 branches across the country on a Sunday from 9am to 12pm. We are also extending opening hours in over 1,000 branches on Monday 25th June from 8am to 7pm, and on Tuesday 26th June to Friday 29th June from 8am to 6pm.

Once again I am very sorry for the inconvenience."

Customers of NatWest should be warned that various criminals are now trying to take advantage of the chaos, and are sending out phishing emails.

As to what caused the glitch rumours abound that it was caused by software upgrade implemented by an outsourced IT function in India, NatWest are currently denying this. At some stage however, they will have to identify and explain exactly what when wrong and why it went wrong.

NatWest Apologises

NatWest sent the following email to its customers this morning at 03:36:

"Dear *****,

We apologise to all of our customers who have been affected by our current technical issues. These resulted in money credited to customers accounts overnight not appearing in their balances as it should. This problem is strictly of a technical nature, we have fixed the initial problem and our priority has been to work round the clock to sort the backlog as soon as possible.

We appreciate this has caused an unacceptable level of inconvenience, and to help you we have over 900 of our branches extending their opening hours today until 6pm. Branches will also be open on Sunday 24th June from 9am to 12noon. Staff in our branches are ready and available to answer any customer questions and help with emergency needs.

Or, please call us at 08457 888 444.

Alternatively, for the latest information and answers to common questions please visit natwest.com

Yours sincerely,


Chris Popple
Managing Director Digital"

Stephen Hester (RBS CEO) has also issued a public apology on the NatWest website:

"Message to Customers from Stephen Hester RBS Group Chief Executive The problems of the past few days have caused disruption and inconvenience for our customers as well as for many customers of other banks. 

I am very sorry for the difficulties people are experiencing. Our customers rely on us day in and day out to get things right, and on this occasion we have let them down. This should not have happened.

Right now my top priority, and the priority of the entire RBS Group, is to fix these problems and put things right for our customers. 

This is taking time, but I want to reassure people that we are working around the clock to resolve these problems as quickly as we are able.

I also want to be clear that where our customers are facing hardship or difficulty we can and will help them. Our staff have already helped thousands of customers to access cash and we will continue to provide this service on a 24 hour basis while we work to resolve the problems. 

I also want to reassure customers that no one will be left permanently out of pocket as a result of this, and again, they should contact us directly about this.

We have doubled the usual number of staff in our call centres, and for the first time ever we will open 1,200 branches across the country on a Sunday from 9am to 12pm. 

Once again I am very sorry for the inconvenience."

There are still problems with some accounts, I for one could not draw any money out of an ATM yesterday afternoon (even though my account is in credit, the ATM told me there was insufficient funds in my account).

NatWest Technical Glitch - Day Three

NatWest and its hapless customers are having to endure a third day of technical problems with its online banking services. The problems are also affecting RBS and Ulster Bank.

The BBC reports that approximately 1,000 NatWest branches opened early today to help customers who are still unable to access their accounts because of technical problems.

NatWest said:

"Unfortunately we are once again experiencing technical issues with our systems and account balances have not updated properly overnight. 

This means where money has gone into a customer's account, there may be a delay in it appearing on their balance.

We can assure our customers that this problem is strictly of a technical nature and we continue to work hard to resolve this."

The Financial Ombudsman has advised what customers' rights are:

• Anyone out of pocket owing to a technical or systems failure has certain rights
• Banks should put customers back into the position they were in had the problem not occurred
• That does not mean extra compensation is a right
• Anyone affected should let the bank know about their situation as soon as possible
• Customers should check to see if any payments due from an account have bounced
• They should also keep a record of how the problem has affected them - just in case a formal complaint is required later

My advice to NatWest is simple, turn the system off and then on again!

Money Lenders Hated For Five Thousand Years

Stephen Hester, CEO of Royal Bank of Scotland, has been visiting a school and businesses in Streatham.

During a Q&A session it seems that Hester is resigned to being "unpopular", as he wryly noted that "people have hated money lenders for five thousand years".

RBS and Fred Goodwin Sued For £2.4BN

An RBS Action Group has been set up by 7,400 private shareholders and 80 institutional ones (including NatWest Stockbrokers - part of RBS) to sue Royal Bank of Scotland (RBS) and its former directors including ex CEO Fred Goodwin for £2.4BN.

The claim states that RBS misled investors in the prospectus for its £12BN rights issue to fund the takeover of the Dutch bank ABN Amro.

Mike Neill, chairman of the action group, is also less than impressed with the FSA whitewash of the sorry affair (as is everyone else!).