Royal Bank of Scotland accused of inflating mortgage profit margins
Royal Bank of Scotland today stands accused of inflating mortgage profit margins as the group announced a swing from a £1 billion loss in the first six months of 2009 to a £9 million profit in the first six months of 2010. Some experts in the mortgage market believe that Royal Bank of Scotland has increased the margin on various mortgage arrangements by as much as double that of their competitors over the last few months.
Whether or not these accusations are correct is open to debate but the very fact that Royal Bank of Scotland is majority owned by the UK taxpayer and also benefited from massive investment in the money markets is causing some resentment. Taxpayers in the UK are not able to see any visual improvements in the terms and conditions available on various financial products despite the fact that UK taxpayers effectively "saved" the operation.
The UK government has attempted to pressurise the Royal Bank of Scotland's management to increase liquidity and reduce rates in the short to medium term although nothing has changed so far. Whether we need further competition in the UK mortgage arena is open to debate but UK taxpayers are adamant that they are receiving little practical return on their significant investment.
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