24 June 2015
The Royal Bank of Scotland came under fire from shareholders at its annual general meeting held on 23 June.
The criticism was aimed at RBS chairman Sir Philip Hampton, who is due to step down from his position at the end of August. Investors highlighted the bank’s market rigging, mis-selling of financial products to customers and systematic mistreatment of firms with distressed finances as particular cause for concern.
Hampton acknowledged that the costs of the bank’s misconduct, at nearly £10 billion, had held RBS back from recovery from the financial crash. He pointed out, however, that a change of culture is ‘well underway’, saying: ‘Culture is a journey, not an end point. You don't change culture by flicking a switch. You have to flick thousands and thousands of switches over a number of years.’
RBS chief executive Ross McEwan, added that it would take another four years for the bank to fully recover. In February RBS reported a first quarter loss of £446 million, mostly caused by costs amounting to £1.3 billion for litigation, misconduct and restructuring. The bank is now due to pay its largest fine yet to US regulators for the mis-sale of sub-prime mortgages before the financial crisis. The exact amount of this fine is not yet known, but the bank has already set aside $2.5 billion to cover it.
After he leaves RBS, Hampton will be taking up the position of chairman of GlaxoSmithKline. He will be replaced at RBS by Sir Howard Davies, who currently chairs the UK Airports Commission and Phoenix Group.
Speaking at the AGM, Davies said that he aimed to ensure that the bank achieved its ‘hugely important economic functions as efficiently as possible’. He added: ‘Hampton and his team have done a lot of the heavy lifting, so I’m hoping that the next five years will be easier than the last five years. I think there’s a lot to do.’