“It’s beyond comprehension that government can offer a rescue package to bail out RBS and the other major banks without conditions,” comments Wayne Sharpe, the founder of Bartercard. “RBS should not have been allowed to reach the point of collapse in the first place, but now that it has been rescued, it’s staggering that it’s allowed to squander such large amounts of money while still failing to lend to some solid SMEs.
“Surely the £300,000 would be better spent on lending £2,000 to 150 successful SMEs that need access to credit in what are extremely difficult trading conditions?”
“The Royal Bank of Scotland has served up a complete double fault this week,” spits Charlie Mullins of Pimlico Plumbers. “It’s outrageous enough that taxpayers, who own 70 per cent of this bungling outfit, are now footing the bill for RBS chief exceutive Stephen Hester’s £9.6m salary package, let alone for RBS executives to celebrate their good fortune courtside at Wimbledon with champagne in hand and a bowl of strawberries and cream! There’s only one well-managed Scottish operation at Wimbledon this year, and hopefully he’ll win it. Come on Andy Murray!”
Dougal Paver, MD of Paver Smith & Co, banks with RBS. While he acknowledges that “this sort of hospitality is essential – it’s not like their high-end customers fancy Grimsby Town v Gillingham on a wet Tuesday night”, Paver reckons the bank will come under scrutiny for as long as it remains in public ownership: “RBS needs to better demonstrate, as much as commercial confidentiality allows, what return it has generated for the tax payer,” he says. “Perhaps if the government’s own scrutiny had been as harsh as the media’s, they wouldn’t have buggered things up quite so spectacularly.” Brett Raynes, managing director of Backup Direct, is more forgiving. “It’s not seen as wholly appropriate to be over-indulging at the moment, especially if your business is having to lay off staff or take huge government subsidies to survive,” he says. “But, life goes on. People need hope. There is enough misery around. Corporate hospitality is not purely a ‘jolly’ – it cements business relationships, aids sales, and helps break down communications barriers. Think of it as the antithesis of Twitter in terms of depth of meaning. Remember that the hospitality industry is a business too – it needs other companies to continue to use its services."
Paul Simons, former CEO of Ogilvy & Mather and chief executive of communications agency Truly London, says RBS is simply doing its job. “This is all quite normal and proper. According to Nielsen Media Research, RBS spent around £7m on UK advertising in 2008 (this excludes Coutts, NatWest, Drummonds, Credit Cards, insurance brands such as Churchill and Direct Line). It’s a key part of its business and RBS would be negligent to abandon its competitive position in the market and leave the door open to Barclays, for example. “I wonder if the general public are becoming confused with the volume of sensational reporting, some of which is totally out of context. Life must go on, businesses must attempt to dig themselves out of the holes created by bad decisions in the past. If RBS is spending £300,000 at Wimbledon, I have to assume this will be assessed on the basis of the results it achieves. If it ends up signing a few corporate clients with annual revenues for the bank of £3m, then the ROI for the event will be ten times cost. Good work.”
Hats off to RBS. When its media relations manager Fiona MacRae noticed we were running a story on the bank, she got in touch with us herself with the following comment: "We fully recognise that as we get our house in order, we need to be seen to change the way we operate. We have cut our hospitality by 90 per cent this year to recognise the reality of our situation. The cost of the Wimbledon event is already sunk in and contracted. We are using it to support our charity partners and customer relationships which are vital to our success. On background, the nature of the contractual agreement is such that we would have to pay 95 per cent of the costs even if we did not use the facility. We have, as the statement points out, cut overall hospitality this year by 90 per cent."
Does this make the bank’s behaviour acceptable? Let’s hear your views.
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