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Sancho Panza

Rbs Closes Controversial Turnaround Unit.....because It Didn't Turn Much Round.

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Reuters 8/8/14

'(Reuters) - Royal Bank of Scotland (RBS.L) is shutting its controversial turnaround division and the two most senior executives who ran it are to leave the bank, a person familiar with the situation said on Friday.

Tasked with recovering loans from customers struggling to pay, the global restructuring group came under fire last year when UK government advisor Lawrence Tomlinson accused the division of pushing small businesses to collapse and then profiting from their demise.

An independent report commissioned by RBS, which is 81 percent owned by the government, cleared the bank of attempting to defraud its customers. But RBS nonetheless said it would change the way it dealt with borrowers in distress and outlined new practices.

Laura Barlow, who joined RBS in 2009, has been appointed to head up RBS's new restructuring unit, which will be more integrated with the main bank than the restructuring group was, the source said. Customers will not see any change, beyond the strategies already outlined by RBS, he added.

The bank declined to comment and would not say whether any severance payments would be made to Sach or Adams. The Federation of Small Businesses also declined to comment.

The restructuring group swelled with loans at the height of the financial crisis, but has reduced in size dramatically as the economy improved and some assets were transferred into a newly created internal bad bank, RBS Capital Resolution (RCR), earlier this year.

RCR had loans with an original value of 30 billion pounds at the end of June, the bank's half-year financial statements showed. RBS would not say what value of loans was left at the restructuring group.'

Customers will not see any change....you've got to love the way they put things.

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I think it is subject to quite a number of Court cases.

No doubt, but this has been going on years. Should have been countered and brought into public years ago. Hence lightweights comment - RBS should not have been able to get away with it for so long.

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The 'independent review' has come under significant attack itself.

Let's be clear, it's been closed and they've gone not because they've been proven to be clean. There are clear allegations of many businesses being raped and their assets being picked up on the cheap for 'turnaround' - but not by the original owners.

At the very least RBS have to get rid of them before conducting a proper review of exactly what went on. Let's not forget, this was supposedly being done on our behalf, the taxpayer.

Read Ian Fraser on the matter of GRG. "Shredded."


You're always got to get victims who lost their stuff and sold on for "less than it's worth" blaming banks to the end of their days. Look at 4 different franchise, new Bentley every 3 years, private plane, butlers and racehorse grooms, Serpico in the 90s recession.

My brother has an associate who has spent a few years at a senior level with GRG; global restructuring group.

Anyway let's hunt out some more debt victims eh. Thankfully house prices were prevented from correcting for others to pick up on at real value.

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Turn around, every now and then I write another few loans and dream of when I can impound

Turn around, every now and then I get a little bit tired of watching them slip into arrears

Turn around, every now and then I get a little bit nervous

That they've no assets left to strip and I cry

Turn around, every now and then I get a little bit terrified

And then I use more debt to disguise

Turn around blue skies, every now and then I draw a chart!

Turn around blue skies, every now and then I draw a chart!

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I'm sure your brother's friend will be a completely independent commentator on the matter.

Try defining that in bold. The best way to destroy 'value' is to lend someone the money to buy an illiquid asset and then to withdraw the loan and tell them they must sell it in a hurry. Or pass that property backing the loan to an internal unit at an equivalent speed. In fact you quote Serpico - you should have learned.

Being a 'profit centre' and having bonus incentives based on that is NOT going to lead to the most even handed dealings.

To actually deny being a profit centre in parliament and then admit to it is pretty damned bad.

Humans are weak. Incentives drive behaviours.

A number cruncher, involved in making the cold commercial decisions in complex matters, and one of the people brought in on attachment from a high profile auditor/insolvency firms, not RBS directly.

I know that - I did learn pre Serpico, and seen plenty of rich braggers in my time living it up, top of the layer cake they think. Got no money and you've got few friends, even if you've extended your claims on assets to extremes via debt. They are claims, and those claims need regular repayment of debt schedule and whatever other obligations agreed to under contracts. How much do you overextend, take on new risk, to go from high comfort life, to the wolves sensing blood?

To be honest I'm disappointed RBS face this claim now, although it seems more about the swap side of things: 2014 http://www.plymouthherald.co.uk/Victory-Plymouth-businessman-landmark-legal/story-20830392-detail/story.html

Telegraph 2014: The company, which operates 28 business parks in southern England, was eventually put into RBS’ global restructuring group before its debt was sold to Blackstone as part of an asset sale by the lender.

2013: http://www.westernmorningnews.co.uk/family-business-8216-brought-bank-8217/story-20328415-detail/story.html

With his wife Diane, and £28,000 of hard-earned cash, Mr Hockin launched a property business 30 years ago. He did it, as he says, “on a wing and a prayer” showing just the kind of buccaneering spirit that Mr Cameron so admires.

That was in 1983. Hard work, shrewd investments and plenty of entrepreneurial flair led to that business, Plymouth-based London and Westcountry Estates, becoming one of the biggest providers of units to small businessmen and women in the Westcountry.

It had an annual rent roll measured in the millions and provided business premises for up to 400 businesses which employed some 1,500 people. All of them were paying their taxes and creating wealth for the nation. In the process, it made the Hockin family very comfortable indeed.

Everything seems so upside down, although we'll see how it works out for them. Maybe they should have been allowed to buy up all of the UK's business parks, as entrpreneurs of the ages.

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 Ian Fraser: Mafioso bankers and my part in their downfall


Radio 4 re-listen 



The Turnaround Game

Listen in pop-out player

Five people have been found guilty for their roles in bank corruption and fraud costing hundreds of millions of pounds. A sixth, it can now be revealed, had already pleaded guilty.

Lynden Scourfield, a middle-ranking banker with Halifax Bank of Scotland, accepted bribes in cash, foreign holidays and sexual entertainment. In exchange he would require small business customers to hire a firm of consultants called Quayside Corporate Services.

The consultants claimed to be able to turn the business customers' fortunes around - but the truth was very different. File on 4 follows the story of two small Hbos clients, former rock and rollers, who fought for a decade to expose the fraud, even as the bank sought to repossess their home.

We ask how this could happen, and how to prevent the ongoing mistreatment of small business customers by the banks.


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