Bonus row 'dragging bank's name through mud'

Published on Thursday 3 December 2009 20:35

SMALL firms' champion Colin Borland yesterday accused Royal Bank of Scotland of "dragging the bank's reputation through the mud", writes Terry Murden.

His comments follow threats by the RBS board to resign if the Treasury blocks plans to pay out an estimated 1.5 billion in bonuses to staff in its investment arm.

Borland, public affairs manager for the Federation of Small Businesses in Scotland, said: "It is a real shame that, while one arm of RBS is publicising that it is treating small business customers more equitably with capped fees and a small business charter, another seems intent on further dragging the bank's reputation – and relationship with the small business community – through the mud.

"While inquiries take place at Holyrood and Westminster into banking in Scotland, many in the real economy still feel that they are paying the price for the Scottish banks' failures. Any progress to date made to rebuild RBS's reputation is at risk if the bank is seen to be being profligate while the real economy is still suffering."

Scottish Financial Enterprise, the body representing the sector, offered some support to the bank's board. A spokesman said: "This is a matter for RBS and the Treasury, but I would make two points: RBS made clear its gratitude to the government for the support it's been given; it is working flat out at restructuring its business for the future, and delivering for customers meantime. Announcements such as this week's new funding for small businesses make that clear.

"But it is an international company and is seeking to manage its operation within international banking parameters. It needs to do that to be successful for all shareholders, including the taxpayer."