Royal Bank of Scotland

RBS/Royal Bank of Scotland is, as of September 2011, 83% “owned” by British taxpayers, following an unprecedented “rescue” by the UK Treasury in late 2008 and a record-breaking bail-out, effectively by UK taxpayers, in late February 2009.

These events had been preceded in 2007 by the biggest takeover of its kind in history when a consortium, comprising RBS, Fortis, and Banco Santander acquired the leading Dutch investment and retail bank ABN Amro (qv).

RBS has been targeted by an alliance of UK NGOs for its investment in coal-fired plants and utilities. These loans include ones to Glencore International (qv) made in November 2006; to Rugeley Power Ltd of the UK, provided the same month; a similar loan to OGE Energy Corp and another to PSEG Power LLC of the US in December 2006; a loan to American Electric Power Co Inc in March 2007; and yet another to LS Power in April 2007.

The bank also arranged a two billion dollar credit facility to Dynergy of the US in May 2007; participated in a billion dollar loan to Southern Co of the US in July 2007; a loan to Noble Group, operating in Australia and Indonesia, the same month; a second loan to LS Power and Dynergy in August 2007; a loan to Oklahoma G&E in November that year; and other loans to OGE Energy and E.ON the same month.

In March 2008, RBS, along with ABN Amro, loaned US$ 700 million to Constellation Energy Partners of the US, and just a month later, along with three other banks, RBS/ABN Amro loaned US$2.5 billion to Florida Power and Light [All data above is from: ”Cashing in on Coal: RBS, UK Banks and the Global Coal Industry”, published by BankTrack, Friends of the Earth-Scotland, People & Planet, Scottish Education and Action for Development, Stop Climate Chaos, and PLATFORM, August 2008].

The same year, RBS became lead arranger for a limited recourse senior debt facility for Oxus Gold's Amantaytau Goldfields' joint venture in Uzbekistan. This was delayed and, as of January 2010, did not appear to have advanced further [MJ 15 January 2010].

In 2006, RBS acted as bookrunner for an US$8.5 billion loan to Xstrata plc [Euroweek, 23 June 2006].

In January 2009, OZ Minerals secured an A$140 million ($91 million) bridging loan from a banking syndicate comprising ANZ Banking Group, Bank of Scotland International, BNP Paribas, Commonwealth Bank of Australia, Bayerische Hypo- und Vereinsbank AG (Singapore), National Australia Bank and Royal Bank of Scotland. The money will mainly be used for “short-term cash needs” at the company’s Golden Grove and Prominent Hill operations in Australia and its Martabe gold-silver project in Indonesia [Metal Bulletin, 23 January 2009] (See also: Societe Generale/SG).

Three UK environmental groups, in October 2009, lodged a complaint with the British High Court, accusing the Treasury department of having breached its own investment rules, by enabling RBS to issue a US$100 million letter of credit to Sterlite Industries, the main subsidiary of Vedanta Resources plc, as well as (through ABN Amro securing a recent significant 4.75% stake in GCM Resources plc, owner of the Phulbari coal project in Bangladesh. (However, by early November 2009, ABN Amro appears to have sold its holding in GCM [Hemscott 9 November 2009]. Whether this was in any way a result of the court case is not known; the High Court rejected the environmentalists’ complaint on 16 October 2009).

In February 2011, the United Nations announced that Fortis had been expelled from the Global Compact, for its failure to adhere to the Compact's reporting rules.

In an undated report, published around the same time, a group of UK NGOS, led by Platform, published a summaryof RBS' investment deals in coal mining and coal power, between late 2008 and 2010. The coal production companies which benefited from RBS' loans during this period were Peabody Energy Corp (101.2 million euros);and Consol Energy Corp nearly (700 million euros) both in March 2010) [Dirty Money:Corporate greenwash and RBS coal finance, Platform et al, 2011].

On 27 September 2011, a ‘girl band’ of environmental activists dressed as ‘oily bankers’ protested outside the Royal Bank of Scotland (RBS)-sponsored “Scottish Low Carbon Investment Conference”., held in the Scottish capital of Edinburgh.

According to a press release from Friends of the Earth Scotland: “The ‘girl band’ sang a well-known chart song with lyrics altered to tell the story of RBS’s ‘oily investments’, which finance companies involved in some of the world’s most environmentally destructive activities, including oil and gas exploration, the development of new coal plants and the mining of tar sands in Canada, described as the most destructive industrial project on Earth”.

FoE-Scotland stated that, since the banking crisis of 2008, the bank had “received more than £345 billion in bail out money from the UK Government – the equivalent of £3,736 from every man, woman and child in the UK.”

However,went on FoE-Scotland: “[T]he taxpayer has no say in the type of investments that RBS makes, and the company continues to invest in projects and businesses that are fuelling climate change and causing environmental destruction and human rights abuses".

On the eve of the 2011 climate change conference (Conference of Parties) held in Durban, South Africa,four organisations (urgewald of Germany, BankTrack, and South Africa groups Earthlife Africa and groundWork)identified the Bank as the 7th heaviest financier of coal fired electricity and coal mining in the period 2005-2011. According to their report, the bank had released 10,946 million euros of such funding [Bankrolling Climate Change, urgewald et al, 2011].

RBS is also a "ring trader" of the London Metal Exchange (LME).