London - The outgoing chairman of the Royal Bank of Scotland has been heavily criticised by shareholders at his final annual general meeting in Edinburgh.
Sir Philip Hampton was lambasted over scandals including local authority loans and the treatment of small businesses, as well as local branch closures.
One shareholder, who is spearheading a damages case against the bank, said Sir Philip was leaving “a terrible legacy” behind.
The chairman said his six years at the head of the bank had been full of ups and downs, but he was sure he was leaving the lender in a stronger position.
The bank's Global Restructuring Group is alleged to have pushed small businesses into administration to take control of their assets and sell them at a profit, which RBS denies.
Shareholder Neil Mitchell accused Sir Philip of failing to act on the issue, which he described as “the business PPI”.
“GRG has become a massive risk to this bank going forward,” he said. “After five years of your tenure, it is still a massive reputational risk.”
Sir Philip said there had been an investigation into GRG, as he refuted claims of “systematic failings”.
Shareholders also raised the issue of Lender Option Borrower Option loans to local councils.
Trevor Smith, of the Campaign for Ethical Banking, asked about the closure of branches following a pledge by RBS in 2010 to be “the last bank in town”.
“Since then the board has broken this promise, closing 150 branches in 2014, of which 93 were the last bank in town and 169 so far in 2015, of which 68 were the last bank in town,” he said.
Sir Philip said: “Since 2010, we have had a 36 per cent decline in the number of people going to our branches... and we have had a something like a 300 per cent explosion in people's use of mobile banking.
“We have said many times, our busiest branch is now the commuter train from Reading to Paddington. The scale of change... frankly it surprised even us. We can't go on doing the wrong things simply because a few years ago we made the wrong decision.”
The annual meeting was held as the government prepares to sell the taxpayer's 79 percent stake in the bank, a process Sir Philip said would begin in the coming months.
Sir Philip will step down as chairman and will be replaced by Sir Howard Davies, who is currently chairing the Airports Commission, in September.
The Independent