RBS Chairman Howard Davies is concerned that customer trust will be hit on the back of ongoing investigations into alleged misconduct that dates back to the financial crash of 2008.
The bank has been accused in the last week of purposely crippling thousands of businesses during the recession in an attempt to bolster its own balance sheet. The accusations come from a BBC Newsnight/BuzzFeed News investigation of thousands of confidential documents but RBS has denied deliberately causing struggling businesses to fail.
Davies told CNBC on Monday that RBS is concerned about the impact of such investigations, explaining that it has adopted a "major program of culture change" to overcome any potential impact on its reputation.
"(Customer trust) is something we take extremely seriously. Since Ross McEwan has been chief executive, he has led a major program of culture change, we removed all bonuses from frontline bankers in the branches, for example, which we believed was distorting their attitude to customers and pushing them, incentivizing them to sell products, I think we are the only bank who have done that," he said.
Davies admitted that the bank has had to deal with a "wave" of distressed businesses but it has not hurt individuals on purpose.
"We have looked in the past carefully at the way in which distressed businesses were handled in the aftermath of the recession. We did of course have a wave of distressed businesses in 2008 and 2009 and beyond. And we accept that in some cases that was not done as well as it should be, that people were not communicated to properly, people did not understand what was happening to them, so we accept all that," he said.
"What we don't accept is that there was any kind of systematic attempt to put people out of business for the benefit of the bank. But it is for the FCA (Financial Conduct Authority) to judge all this and we hope they will do so fairly soon," Davies told CNBC.
Davies also said that it is inevitable that institutions will have to deal with the fines rather than individuals.
As a former deputy governor of the Bank of England (BOE), Davies said Monday that the U.K. government's fiscal response to Brexit needs to be outlined soon.
Speaking on BBC radio on Monday morning, Ben Broadbent, the current deputy governor of the BOE said the institution would not intervene in the foreign exchange market.
Media reports over the last couple of weeks have suggested that the U.K. government will opt for a "hard Brexit". This would mean that financial services would likely lose their "passporting" rights, as the cabinet would make immigration control its main priority. However, Brexit negotiations involve way more than the current immigration-passporting rights debate.
"Brexit is extremely complicated. People have tended to focus on freedom of movement versus market access," Davies told CNBC.
"Clearly there's going to be a total deal and there will be trade-offs made. And the budget is going to be one of them ... I would very surprised if there were something where there was a sort of straight forward trade-off we pay."
The Financial Times reported Monday that the British government is considering a plan to continue paying billions into the EU budget to keep access to the EU's single market.
"Whilst inevitable that this get reported in a very excitable way, I think it is probably wise to calm down a little bit and give politicians the time to negotiate what they want," Davies said.