Banks, bonuses and the Big Five

Labour's two-pronged assault on the banking sector is trying to cement a view in voters' minds that the party is on the side of consumers

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RBS 'failed to act' on FCA mortgage advice concerns

The Financial Services Authority, the FCA's predecessor, raised concerns in November 2011 about branch and telephone sales at RBS and NatWest but it was almost a year later before the firms started to take steps to put things right.

The firms made assurances to the FSA in July 2012 that the necessary changes were underway to address the regulator's concerns, but the FCA said this "failed to happen".

Where we raise concerns with firms we expect them to take effective action to resolve them without delay. This simply failed to happen in this case.

Taking out a mortgage is one of the most important financial decisions we can make. Poor advice could cost someone their home so it's vital that the advice process is fit for purpose. Both firms failed to ensure that their customers were getting the best advice for them.

– Tracey McDermott, director of enforcement and financial crime at the FCA

More: RBS fined £14.5m over advice given to mortgage customers

RBS to contact 30k customers over mortgage failings

The Royal Bank of Scotland will contact 30,000 mortgage customers who may be concerned about advice they were given by the state-backed bank after the Financial Conduct Authority found "serious failings" in its mortgage advice to consumers.

RBS fined £14.5m over 'unsuitable' mortgage advice.
RBS fined £14.5m over 'unsuitable' mortgage advice. Credit: PA

The City regulator said that only two of 164 sales made by the state-backed bank between June 2011 and March 2013 were considered to meet the standard required overall in a sales process.

It found RBS and its retail arm NatWest failed to consider the full extent of a customer's budget when making a recommendation, while staff did not advise customers what mortgage term was appropriate for them.

The regulator said there was no evidence that there was widespread detriment to customers, although RBS and NatWest will contact 30,000 consumers so they can raise any concerns they have about the advice they received.

RBS said that in response to the regulator's findings at the end of 2012, it overhauled its mortgage sales process and re-trained all mortgage advisers.

More: RBS fined £14.5m over 'unsuitable' mortgage advice

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RBS profits surge in first half of 2014

Profits at taxpayer-backed RBS have risen significantly in the first half of the year.

The bank said its preliminary results were "significantly stronger than the marked has been expecting", with an operating profit of £2.6bn compared to £708m in the first half of 2013.

RBS' profits for the first half of the year were much better than expected.
RBS' profits for the first half of the year were much better than expected. Credit: Philip Toscano/PA Wire/Press Association Images

However chief executive Ross McEwan issued a note of caution, saying there would still be "bumps in the road ahead" as the bank deals with various "legacy issues", such as the mis-selling of Payment Protection Insurance.

Along with the good news on profits, RBS also announced it had set aside an extra £250m to cover fines for mis-selling PPI and interest rate swap products.

Read: RBS boss admits 'shock' over depth of bank's problems

RBS in 'danger of failing' due to '£100bn black hole'

British taxpayers risk losing their entire £45 billion stake in Royal Bank of Scotland (RBS) which is in grave danger of failing within 10 years, according to an explosive new book.

According to the Independent on Sunday, a new study of the bank, which brought the UK to the brink of financial ruin, reveals RBS still has a £100bn “black hole” in its finances due to “five broad areas of alleged criminality and wrongdoing”.

Former Royal Bank of Scotland Chief executive Fred Goodwin Credit: PA

Financial journalist Ian Fraser, who wrote Shredded: Inside RBS, The Bank That Broke Britain, said: "The result has been that, at the time of writing, RBS is probably a worse bank than it was under Fred Goodwin.

“If the right moves are now made, RBS could become a great bank again. If they’re not, I doubt it will even exist in 10 years’ time".

Shares climb but RBS chief says 'past issues' remain

Shares climbed an extra £2.5 billion adding to the value of Royal Bank of Scotland today after it said quarterly profits had doubled.

More: RBS profits rise to £1.64bn

RBS, which is 80% owned by the taxpayer, said profits before tax had risen to £1.64 billion from £826 million in the same period last year, prompting shares to rise by 13% after news broke this morning.

BS chief executive Ross McEwan said there were still "plenty of issues from the past to reckon with." Credit: Andrew Milligan/PA Wire

Shares settled at 9% - despite a warning from RBS chief executive Ross McEwan that there were still "plenty of issues from the past to reckon with".

Mr McEwan said the latest figures showed the "great job" it could achieve while in a "steady state.

Read: RBS 'still has work to do' after reporting pre-tax profits

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RBS 'still has work to do' after reporting pre-tax profits

After the announcement of a pre-tax profit of £1.64 billion for Royal Bank of Scotland, Chief Executive Ross McEwan has said that his bank "still has a lot of work to do."

In a statement he said: "We still have a lot of work to do and plenty of issues from the past to reckon with.

"Everyone at RBS is focused squarely on doing everything we can to earn the trust of our customers and in the process change the banking sector for the benefit of the UK.”

Chief Executive Ross McEwan says that RBS still have a "lot of work to do" after reporting huge profits. Credit: Philip Toscano/PA Wire

Read more: RBS 'still has a long way to go' to rehabilitate itself

RBS report pre-tax profits of £1.6bn in quarterly report

The Royal Bank of Scotland have reported a pre tax profit of £1.64 billion for the first quarter for 2014, up from £826 million from last year.

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RBS Q1 results highlights: Operating profit £1.5bn (£747m Q1 2013); Capital ratio up to 9.4%; Cost to income ratio 66% (73% Q4 2013)

Government stake blocks 200% RBS bonuses

The firm responsible for managing the Government's stake in Royal Bank of Scotland will vote down any resolution proposing bonuses of 200% of fixed pay, the part-nationalised bank has announced.

A branch of the Royal Bank of Scotland in Piccadilly Circus in central London.
Royal Bank of Scotland was part-nationalised following the 2008 financial crisis. Credit: Philip Toscano/PA Wire

RBS said UK Financial Investments informed the bank of its opposition to a 2:1 variable-to-fixed pay ratio - which it described as the "sector norm" - and therefore the board will not bring the proposal before its annual general meeting.

"The board acknowledges that this outcome creates a commercial and prudential risk," it added.

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