Monday 6 May 2013

RBS boss Hester "desperate for people to have to borrow to eat"

From the BBC and the BBC:

Royal Bank of Scotland is "desperate" to lend to UK households who need to "borrow money for food", the bank's chief executive has claimed.

One in five UK households borrowed money or used savings to cover food costs in April, a Which? survey says. In an interview with the Sunday Times, Stephen Hester said RBS was sitting on £20bn in cash but economic worries meant businesses were not borrowing, so the RBS was seriously considering a move into payday loans.

"We are lending as much as we can," he said, adding that the bank could not "force companies to borrow. But it's not enough. If only the government could find a mechanism to push people's wages down and push rents up, then we'd be able to tap into a whole new market."

The Which? survey suggests the equivalent of five million households used credit cards, overdrafts or savings to buy food. Partly state-owned RBS reported a return to profit in its quarterly results on Friday. It announced pre-tax profits of £826m and said it lent a total of £13.2bn in the first three months of the year - £7.8bn of it to small businesses.

But like other banks it has abandoned its stated aim of supporting the UK's economic recovery by increasing business lending further because of far more lucrative lending opportunities, such as people's need to put food on the table.

The consumer group tracks the spending habits and behaviours of 2,000 people every month. Which? boss Richard Lloyd described the findings as "shocking". RBS boss Stephen Hester described the findings as "a godsend". The government said tax and benefit changes meant working households were now better off, while working households reported the opposite.


H/t BobE.

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