The Royal Bank of Scotland (RBS) has been accused of making money from weapons of mass destruction after it was named as the biggest financial backer of nuclear bombs in the UK.
A new international analysis by disarmament groups reveals that over the last four years RBS has lent £4.5 billion to 21 major companies involved in nuclear weapons in the UK, the US, France and India. They include firms that work on the Trident weapons systems, such as BAE Systems, Lockheed Martin, Jacobs Engineering and Serco (see table below).
One of the bank’s most controversial loans has been £27 million to Larsen & Toubro, which develops the launcher system for India’s Akash nuclear missiles. India is widely regarded as a nuclear outlaw because it has not signed the nuclear non-proliferation treaty.
‘Don’t Bank on the Bomb’, a report complied by the Dutch peace organisation Pax and the International Campaign to Abolish Nuclear Weapons (ICAN), lists RBS in a “hall of shame” for its nuclear loans. Other UK banks on the list include Barclays with £3.8bn in loans, HSBC with £2.9bn, Old Mutual with £2.8bn and Lloyds with £1.3bn.
While Scotland is trying to get rid of weapons of mass destruction, RBS is trying to make money on them. Wilbert van der Zeijden, Pax
Internationally the report names 382 banks, insurance companies and pension funds from 27 countries that have made £323 billion available to nuclear weapons producers since January 2012. It also highlights the fast-growing number of financial institutions – 53 – that now prohibit or limit their nuclear investments.
One of the report’s author’s, Wilbert van der Zeijden from Pax, was in Scotland last week briefing politicians and campaigners on his findings. Most Scottish people, most Scottish political parties and the Church of Scotland have all rejected Trident, he pointed out.
“It’s time the biggest Scottish bank, RBS, stopped financing the companies making Trident,” he said. “While Scotland is trying to get rid of weapons of mass destruction, RBS is trying to make money on them.”
RBS did have a policy of restricting its loans to weapons companies, but this had not prevented it from financing 21 nuclear weapons companies, Zeijden added. “A treaty banning nuclear weapons is coming. Continuing to invest in their producers is a bad investment strategy.”
Rebecca Sharkey, co-ordinator ICAN UK, said: “Anyone with a Royal Bank of Scotland bank account or pension may be unwittingly and unwillingly complicit in funding companies that produce weapons of mass destruction.”
The new report would increase the financial stigma on nuclear weapons, she argued. “It will help people and institutions to divest ahead of a new global ban treaty that will likely make the financing of nuclear weapons illegal as part of a wider prohibition.”
John Ainslie, co-ordinator of the Scottish Campaign for Nuclear Disarmament, pointed out that in the Netherlands banks had been forced to rethink their investments in nuclear weapons after customers threatened to take their business elsewhere.
“Just when you thought the reputation of RBS couldn’t fall any lower, we find out that they are taking our money and investing it in nuclear weapons,” he said. “RBS don’t just support Trident they also fuel proliferation by funding India’s nuclear missile programme.”
RBS was bailed out by the UK government after the financial crisis in 2008 and is now 73 per cent publically owned. In recent years the bank has been refocusing its business to become simpler and more concentrated on the UK.
An RBS spokesman did not dispute the loans to nuclear bomb companies. “All of our lending to defence companies is subject to enhanced due diligence,” he said.
“RBS operates a clear prohibition on the funding of highly controversial weapons including cluster munitions, anti-personnel landmines, biological and toxin weapons, chemical weapons and blinding laser weapons.”
RBS’s nuclear loans
|Babcock & Wilcox||£40m|
|Larsen and Toubro||£27m|
Total / £4,597m
source: Don’t Bank on the Bomb
A version of this story was published in the Sunday Herald on 22 November 2015.
Cover image: Ministry of Defence | Open Government Licence