Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
A GROUP REPRESENTING around 60 Irish businesses will be appearing before the finance committee today demanding compensation from Ulster Bank for how the bank handled their loans during the recession.
Global Restructuring Group Ireland was set up during the recession to deal with SMEs who had borrowed between €1 million and €25 million and were in financial difficulty.
Businesswoman Jackie Lavin has set up the Ulster Bank GRG Business Action Group, representing 60 companies in Ireland who were taken into the GRG Group between 2011-2013 (roughly).
“We’re representing a group of all types of businesses from right across the country who’ve all been treated the same way. This covers warehousing, distribution, farmers, motor traders – it’s literally across the board and right across the country.”
These businesses are to tell the finance committee that they were unfairly treated by the bank, who felt that their properties were repossessed unnecessarily in what they’re calling the ‘grab for cash’.
“It’s [a similar issue with] tracker mortgages and vulture funds – I want to draw attention to the business groups,” Lavin says.
The group was formed in the wake of a leak by the BBC Newsnight and Buzzfeed News, which revealed that Royal Bank of Scotland’s internal strategy during the recession was to sell companies on, and sometimes were undermined by a conflict of interest.
The leaked internal documents contradicted the bank’s previous statements that GRG acted as an “intensive care unit” for ailing firms, tasked with restructuring their loan agreements to “help them back to health”.
When confronted with the leaked evidence, the RBS said: “In the aftermath of the financial crisis we did not always meet our own high standards and let some of our SME customers down.”
But it continued to deny that it had “targeted businesses to transfer them to GRG or drove them to insolvency”.
Last November, Britain’s financial watchdog said Royal Bank of Scotland was guilty of “systematic” mistreatment of distressed small businesses that came to it for help, but cleared the bank of the most serious allegation that RBS forced businesses into default for its own benefit.
RBS announced alongside that report’s findings that it will automatically refund complex management fees worth £400 million to SMEs that went through its controversial restructuring process.
Lavin, encouraged by this action, began checking if something similar had happened here.
I started ringing in October, put ads in the paper just before Christmas, then we got all the responses back, and we had our first meeting last Saturday.
“We’re demanding compensation for taking our businesses,” says Lavin. “If you take over 2,000 companies, if you equate that to 10 jobs per company, that’s 20,000 jobs.”
The finance committee will be discussing Business and Banking at Committee Room 2 from 10am today.
To embed this post, copy the code below on your site
What really gets my goat is the fact that all the banks made a business decision with each loan they sold/provided. If they’re stress testing models were completely inaccurate and useless, why should the loaner/customer have to bear the full responsibility. The banks made bad business decisions and walked away unaffected, the tax payer has been left to pick up the tab.
What you are suggesting is some sort of risk sharing model between the lender and the borrower.
Such an arrangement already exists – it’s called an investor. But they reasonably take a share of the company ownership to match their input.
I’m aware the article refers to businesses borrowing but the banks dished out commercial AND personal loans irresponsibly in order to increase their profits and market share. In my opinion many of these loans should never have been granted but the banks’ greed got in the way of responsible and ethical lending practices. The consequences for the banks were zero
@Paul Delaney: The Rotschild family are not in the business of loosing money. Their net worth is only 350 billion or so. They can’t afford to be out of pocket, so you pick up their losses. They do own the central bank you know (Ireland: Central Bank and Financial Services Authority of Ireland)
@Paul Delaney: The banks did not have zero consequences.
Several went bust and were closed down with their operations taken over by others.
Some still exist but are nationalised
Even bank of ireland managed to plummet in value to a shadow of it’s former value.
The courts are processing the cases for the managers charged with breaches of the law… some already in jail, some fined, some still going through the process.
The owners of the banks – the shareholders – got completely screwed and lost billions.
I’m not objecting to any of the above, but the nice soundbite about the banks having no consequences is simply not true. You may argue there should have been more consequence but I would be curious as to what more you would expect?
For every reckless borrower was a reckless lender.
The lender walked away in tact and that’s why there is legal jargon in the very small print of your loan.
The cop out is to print in large that YOU CAN LOSE YOUR HOUSE IF YOU DON’T KEEP UP THE REPAYMENTS.
@justanothertaxpayer
It’s an interesting debate, those who bought bank shares took on an investment risk that they were aware. Although some believed the hype of so called “blue chip” shares and the views that the “banks will never fail” it’s an different debate. Each shareholder knowledgeable took on that investment risk.
Several banks went bust and rightly so due to irresponsible lending practices.
The banks that survived were effectively bailed out by the taxpayer and this is the crux of my argument. The tax payer did not knowledgeable take on the responsibility for bailing out these private entities and their irresponsible lending practices. It’s not a nice sound bite. While their share prices may have been hammered they still survived through the dictated tax payers support. As for bank officials going through the legal process, well that’s because they “allegedly” defrauded shareholders, auditors etc…another different debate!
Good Woman Jackie – you deserve support with this. You were badly treated by self serving banks.
Ive spoke to Jackie and Bill over the years and found them to be very friendly and polite. Best of luck Jackie
Bill Cullen’s aul wan is looking well
There is the bride of Frankenstein, presumably they don’t have an open fire.
Great Dail performance by Jackie–she made some very good points
Hi Jackie. I have just read your article. I am also a victim of Ulster Bank i would like to join you and your 60 clients. My name is Peter OSullivan my email is osullivanauct@eircom.net. please contact me asap.
have your say