Pharmacy owners who claim to have been victims of RBS's alleged mistreatment of small businesses describe their experiences, but the bank stands by its strategy for dealing with firms in financial distress

"I was harassed into restructuring my business"

Chiman Patel, director of Sykes Chemists

We have been with RBS for 35 years, from the day I started my business. In 2008, the bank came to us and wanted to take all our loans onto its books, which to me wasn't a problem, so I agreed.

In 2009, we had an issue with category M clawbacks and that tipped us into our overdraft limit. We were pretty secure in our income – we had guaranteed loans from Alliance Healthcare, our loans were secured with 15 properties and we had a personal guarantee of £300,000 – but RBS wouldn't listen at all. We were put into the GRG and, after that, it decided to charge us a monthly arrangement fee.

Chiman Patel, director of Sykes Chemists, says he has lost about £150,000 to RBS and was harassed into restructuring his business	More on RBS's alleged mistreatment of small businesses Four more pharmacies hit by RBS scandal Pharmacy group to sue RBS after £1m loss The Tomlinson report
	It used to ring me and demand this and that, and pop into the branches. Some of its representatives even went to great lengths to look into my personal accounts. It was an absolute nightmare. You could see it just wanted the assets of our company.

To date, we've lost in the region of £150,000. Our business was restructured and we had to create a subsidiary.

We went through a phase when we thought were on our own – we didn't realise there were so many other independents in the same situation.

We did raise issues with our MPs at the time, but RBS did nothing about it. The cost to us shouldn't have happened. The bank's actions need to be justified.

"The £336,000 loss nearly ruined my marriage"

Anonymous pharmacy owner

I owned a business with four pharmacies when I went into the Global Restructuring Group (GRG). That wasn't all the fault of RBS, because I had got behind on my payments. But, once I was in GRG, it was only interested in getting my business off me.

It revalued my business at 33 per cent of what it was previously worth, and I had to pay £5,000 for that valuation. I argued and said that two months ago, it valued my business at 66 per cent more. Its response was: "Nobody's ever been sued for undervaluing a business."

I estimated it cost me £336,000 a year in charges incurred by interest rate swaps and fees taken out. Then it repossessed everything. It was awful. My marriage nearly collapsed.

I've now got a new pharmacy and I want to spend my energy on my new business. I don't want to rake over the past, but it's the hypocrisy of the whole thing. When the banks failed, we [the public] bailed out the RBS. When I was in trouble, they just wanted to whack fees on and take my business off me.

 

"I never missed a loan payment but we were classed as a business in distress"

Anonymous pharmacy owner

About five years ago, we agreed a large, 10-year loan from RBS for our business expansion plans. We had one pharmacy at that point, employing three people. We never missed a loan payment or went beyond our overdraft limit, and always supplied relevant information to the bank. We have been overpaying this loan and now have a group of five pharmacies, employing more than 60 staff.

I have been looking to refinance the business to help innovate and develop new services, help cash flow and drive a growth accelerator plan for the next three to five years. RBS has been particularly unhelpful. It has started reviewing my overdraft facility on a month-by-month basis, and moved me from my former relationship manager of five years to a specialist manager for "distressed" businesses. I'm now looking elsewhere for refinance options from other lenders.

RBS responds

In the boom years leading up to the financial crisis, the over-heated property development market became a major threat to the UK economy. RBS did more than its fair share to fuel this and commercial property lending was one of the key drivers of our near collapse as valuations rapidly plummeted.

Facing up to these mistakes has been a difficult, but essential part of making RBS a safe and strong bank once again. That has been one of GRG's main tasks. GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives. Not all businesses that encounter serious financial trouble can be saved.

We are already committed to an inquiry to investigate how customers are treated by RBS when facing financial difficulties and ensure that we provide them with appropriate support.

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