RBS to end ‘nightmare’ as scandal report is published
The Times, 31.01.18
RBS report to be published
The Financial Conduct Authority has said it is willing finally to issue a highly critical report into Royal Bank of Scotland’s scandal-hit restructuring unit. In a remarkable reversal of its stubborn resistance to pressure to publish the contentious investigation into the bank’s global restructuring group, the watchdog said that it would produce the full document once it had the consent of the small number of individuals cited in it.
The dramatic change of heart was revealed yesterday after Ross McEwan, the RBS chief executive, had told the Treasury select committee he would not object to the report being issued.
GRG was said to be a “turnaround” division that returned struggling companies to health after the financial crisis. In reality, the taxpayer-owned bank placed little emphasis on helping businesses, instead extracting income from them. Many business owners have blamed the bank for destroying their livelihoods.
The regulator has been the subject of a heated row over its refusal to publish the full report, with sustained criticism from GRG victims, business groups and politicians over its decision.
Three summaries of the findings have been issued, but the FCA has said repeatedly that producing the entire document would not be in the public interest and that there were legal reasons not to do so.
The investigation found systematic and widespread mistreatment of small and medium-sized companies by GRG.
Sir Howard Davies, RBS chairman, told MPs yesterday that the exposure of the bank’s “awful” mistreatment of small businesses had been “the stuff of nightmares”.
Sir Howard and Mr McEwan expressed their regret over the “insensitive” treatment of certain companies during a bruising encounter with the committee.
Mr McEwan was also forced to admit that he had painted a misleading picture of the bank’s restructuring unit. In 2014, Mr McEwan defended GRG from allegations of such poor conduct by saying it “turns round the vast majority of businesses that it works with”.
Yesterday, he conceded this was not the case for the small and mediumsized companies handled by the unit, only one in ten of which were returned to the main bank.
Sir Howard admitted his “acute embarrassment” at an internal memo that told staff to focus on extracting income from “basket case” small businesses and had advised GRG workers to “let customers hang themselves”. Sir Howard said that the memo, which was revealed by The Times and the BBC last year and had been published by the Treasury committee, was “the stuff of which nightmares are made” for a chairman or chief executive. He said that the document had not been widely distributed to GRG staff, but added: “It’s quite hard to believe how people could have written in such a way about customers. We can do nothing but abase ourselves … it is absolutely awful.”
Mr McEwan said that RBS had changed markedly and that he was focused on putting things “right for customers”, including through a GRG complaints and redress scheme.
However, Tony Boorman, managing director of Promontory, which conducted the investigation into GRG on behalf of the FCA, told MPs that RBS continued to dispute “many, if not all, of the significant findings” of the report.
The FCA said that it welcomed news of RBS’s willingness for the report to be issued. “On this basis, we are content to publish the report. To do so will also require the consent of those who provided the information in the report and any individuals who are identified.”
These individuals will be approached once the regulator has decided whether to take enforcement action against RBS over the scandal.
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