RBS Taxes, Hailed as Contribution to Society, Erased by Rescue
By Simon Clark
Jan. 23 (Bloomberg) — Fred Goodwin, Royal Bank of Scotland Group Plc’s former chief executive officer, once said that taxes were part of his bank’s contribution to society.
“The benefits of our success stretch far outside the company,” Goodwin, 50, wrote in RBS’s 2006 corporate responsibility report. “We continued to be the largest corporate taxpayer in the U.K.,” he wrote. That helped in “supporting the government in the provision of public services such as schools, hospitals and state pensions.”
As Goodwin’s RBS contract expires next week, after more than a decade at the bank, the 20 billion-pound ($28 billion) cost of bailing out the bank surpasses the corporate taxes paid by the Edinburgh-based lender during his tenure. The shortfall shows how Goodwin’s ambitions for RBS spiraled as he expanded the lender’s balance sheet more than 20 times in a decade to 1.73 trillion pounds, making it bigger than the U.K. economy.