Royal Bank of Scotland head Brian Hartzer has alleged the bank’s former management of making use of the business as a “cash cow” for financing the remainder of the group’s increasing while he unveiled his plans of reducing further expenses.

RBS had gone into a huge growth spurt under the management of Sir Fred Goodwin following its acquisition of the NatWest in 2000, ending in the bad-lucked buying of ABN Amro in 2007.

Hartzer told yesterday that they have a good franchise with loads of opportunities but with a business which has been badly managed for several years, being managed as a cash cow to finance acquisitions for several years.

Mr. Hartzer is former chief executive of ANZ Australia, a relatively narrower industry.

He said that their business had focused on short term profits and took advantage of their customers. As a result, the customers became extremely dissatisfied with their quality of service. They lost faith that the industry had any consideration for them at heart and shareholders started diminishing by numbers to almost nil.

Now RBS plans to spend £800 million in the next five years over 65 projects so as to make the retail bank progress.