Bailed-out bank Royal Bank of Scotland is back in the black and lending again – but still continues to sack their own workers. The 83 per cent state-owned bank posted third-quarter pre-tax profits of £2 billion last week, following a £678 million loss earlier this year and a £1.6bn loss in 2010.
The bank reported £8.1bn in lending to small and medium-sized enterprises (SMEs) – just shy of the £8.2bn target set out under the government’s controversial Project Merlin deal last year. The news came within a week of government figures which showed that Britain’s banks are turning down more than one in three applications for small business loans – ignoring a key part of the deal. The Office for National Statistics reported just 65 per cent of small business loans were approved in 2010, compared with 90 per cent in 2007. But it revealed that RBS was still the biggest fish in the small business pond, providing 40 per cent of SME loans in Britain compared with 35 per cent in 2010. The report brought RBS small business lending to £23.6bn so far this year – around 5 per cent short of the Project Merlin target.
But economists savaged the bank today for persisting with mass lay-offs despite its multibillion bounce-back. The bank announced plans to axe more than 20,000 jobs in the wake of the 2008 bailout. And RBS chief executive Stephen Hester said yesterday the cuts would continue “to reduce the impact on customers and shareholders of the regulatory and market developments.”
Left Economics Advisory Panel co-ordinator Andrew Fisher blasted the banker’s comments, saying that they showed the bailout had failed to change City culture.
It is sacking workers to generate dividends for shareholders on the back of taxpayer pounds, while continuing to make risky and bad investments through its Global Banking and Markets arm. This is further evidence that the bailout was the privatisation of public money, not the public ownership of private banks.
What we need is the full public ownership and control of UK banking to end the culture that has led our economy to the precipice and to direct investment where it is socially useful.”
