But, as RBS boss Ross McEwan is aware, it is the cumulative retro- rockets of reputational damage that is the problem as the bank tries to persuade punters and politicians it is a transformed business from that which plunged into state-ownership.
McEwan has put giving good service to customers front and centre of his strategy since taking the hot seat nearly a year ago, after predecessor Stephen Hester had spent years with a different focus of sorting out the RBS financial basket case.
But the boss must sometimes feel he is walking up the down escalator in trying to change perceptions as the bank is beset by bad publicity, what he himself has ruefully predicted as awaiting “bumps in the road”.
There have been the big Libor-rigging fines, the wrongful selling of payment protection insurance (PPI), the independent reports saying the bank’s treatment of small businesses was poor (including the mis-selling of rate-hedging products to SMEs), and a continuing probe by the Financial Conduct Authority (FCA) into whether its now-disbanded global restructuring group manipulated small companies into financial distress.
Now we have this latest FCA judgment that RBS and NatWest sold mortgages to customers between 2011 and 2013 – when the bank was in taxpayer ownership and higher standards might have been expected – without properly assessing whether those customers could afford them.
Advisers failed to check customers’ budgets properly or recommend the most appropriate mortgage term. Some advisers even gave their own Mark Carney-like guidance on what they thought would happen to interest rates. It sounds like getting advice on one of the most important commitments many people make from a guy in the pub, whose friend knows a bloke who says…
Esoteric, it ain’t, more like meat-and-two-veg retail banking, and a damning FCA statistic is that only two of 164 sales reviewed met the required standard. And this slapdash approach was happening between three and five years after the financial crash when banks had allegedly learnt their lessons and, in the infamous words of Barclays’ Bob Diamond, the time for remorse was over.
To McEwan’s credit, since November 2012 when he joined RBS as the head of its retail operation, the group has overhauled its mortgage sales processes and retrained all staff – including taking them completely off the front line for an extended period. Even so, RBS will not welcome yet more attritional publicity as it takes the scenic route back to grace.
Competitive threat cannot be discounted
Latest data from Kantar shows continuing pressure from discounters Lidl and Aldi on Britain’s big supermarket groups. The discounters turned the screw over the summer, with more than 50 per cent of households shopping at least once at one or the other.
However, even though Lidl and Aldi now threaten Asda, Sainsbury’s, Tesco and Morrisons, it is Tesco and Morrisons which are most vulnerable because of the disruptive operational change that is happening or in the works.