Newspaper article The Evening Standard (London, England)

We Still Need to Call the Banks to Account

Newspaper article The Evening Standard (London, England)

We Still Need to Call the Banks to Account

Article excerpt

WHEN a bank that is 83 per cent owned by the taxpayer makes an operating profit of [pounds sterling]1.1 billion in six months, up on [pounds sterling]15 million a year ago, the taxpayer should be the first to rejoice. The news that RBS has made this enormous profit follows the trend of all the major banks that reported this week and it is good for the City, good for the economy. What gives rather less cause for congratulation is the fact that the proportion of profit paid in bonuses has risen significantly, up from a ratio of 22 per cent last year to 30 per cent this year. Frankly, that increase is impossible to justify in a taxpayer-owned institution.

Where RBS, like all the banks, also needs to be called to account is in respect of its lending practices, specifically to credit-worthy small and medium sized businesses. Net lending is down by three per cent on last year, which is less worrying than the detail behind the figure. Many of the banks' business clients complain that they are being moved from generous overdraft facilities on to secured loans with usurious rates of interest. …

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