The emerging allegations of banks mis-selling derivatives to small businesses are "not remotely comparable to the PPI problem", Royal Bank of Scotland's chairman Sir Philip Hampton told shareholders yesterday.

But his vow of a "shift in culture" at RBS met with shareholder claims that the bank was "forcing businesses into administration" and setting "unrealistic sales targets" for staff which posed future risks for the bank.

The annual meeting in Edinburgh, attended by only 180 shareholders and largely free of controversy over executive pay, was lobbied outside by the Bully-Banks campaign which claims widespread mis-selling of interest rate swap agreements (IRSAs) to small businesses.

Inside, shareholder Paul Nightingale, an Exeter businessman, told the chairman: "It would appear many small businesses are in severe financial difficulties as a result of mis-sold swap agreements with RBS – you have talked of the massive cost of PPI and said we must learn the lessons, but have we learned them?"

Sir Philip said: "We have looked pretty carefully at our sales processes in relation to these products and I believe they were extremely strong." Only one of 67 complaints to the Financial Ombudsman Ser-vice had so far been upheld, he added. The swaps sold by RBS had been "simple risk management products to control exposure to interest rates" and had been taken up by "more switched-on customers".

But Mr Nightingale responded that the products were "far from simple", adding: "Personally my breakage charges have been in excess of £1.2 million. That is crippling me in every respect. There are thousands of businesses in the UK that RBS is forcing into administration, it is absolutely unsustainable what is happening."

Shareholder Alison McLean, an official of the Unite union, said bank staff were under extreme stress from the threat of disciplinary action for failing to meet short-term sales targets.

The bank was thereby creating "a culture where excessive risk becomes acceptable". She called on Sir Philip to commit to a joint approach with Unite to reduce stress and to "eradicate the bonus culture that brought about the likes of PPI mis-selling".

Sir Philip responded that the bank had "changed our targeting structure around sales processes in the retail business".

He agreed to work with the union on stress.

A Unite staff representative Marie Hernan complained that 28,000 bank staff had a 0% pay rise this year, adding: "When staff see City and investment banker bonuses they are demoralised and demotivated."

Sir Philip said the zero pay rise included the bank's most senior 10,000 people, adding that he had "a lot of sympathy" with concerns about excessive executive pay.

The bank's remuneration report, which in January reignited the bank bonus row and prompted the waiving of chief executive Stephen Hester's £1m bonus, was later approved with a vote of 99.3% (the Government through UKFI has 70% of voting share capital).

Gavin Palmer, a former director of two small shareholder organisations, said he was concerned that the bank's renamed international markets division still had 15,000 employees, had increased its derivatives exposure by £100 billion since 2007, and was not making the cost of its capital. He also complained that three non-executives all had connections with accountant KPMG, and called for a process which would enable directors to be nominated by shareholders.

Sir Philip said: "I am very comfortable that there isn't the remotest suggestion of any impropriety or conflicts of interest in people's jobs and the jobs they are doing for RBS."

He said few investment banks were meeting the cost of capital, and problems of investment performance were being tackled.

A shareholder asked whether the bank's commitment to openness and transparency would extend to publicising the tax status of "449 subsidiaries located in secrecy jurisdictions". Sir Philip said RBS had been an early signatory to the HMRC code of proper corporate behaviour, which re-quired companies to "comply with the law but behave sensibly".