RBS mistreated ailing businesses, says watchdog
Only one in ten of the troubled businesses put into Royal Bank of Scotland’s scandal-hit turnaround unit ever ended up returning to the main bank, according to a leaked report from the City watchdog.
Small and medium-sized companies placed under the supposed care of the global restructuring group almost all suffered from some form of financial abuse, whether it be raised borrowing costs or an increase in their fees, the Financial Conduct Authority has found. A copy of the FCA’s report, leaked to the BBC, found that 92 per cent of GRG customers were subject to “inappropriate actions” during their time under the RBS division’s control, findings that Ross McEwan, the bank’s boss, said were “damning”.
Mr McEwan told staff in a memo yesterday that the details of the report were “unfortunately, when taken out of context, very damning” as the statebacked bank attempted to respond to the leaking of the 361-page document.
“GRG was there to help customers in financial difficulty but we did make mistakes in how we managed some customers,” Mr McEwan wrote in his memo. In its report, the leaking of which has prompted an internal inquiry at the FCA, officials are said to have complained that RBS did not properly cooperate with the regulator’s investigation, adopting a “narrow compliance” with its requests for information. The watchdog is understood to have found only 10 per cent of businesses that were put into GRG survived the process.
Last November the FCA provided an update on its investigation into GRG, which stated it had uncovered “some isolated examples of poor practice”.
RBS has already said it has put in place new complaints procedures to help businesses put into GRG between 2008 and 2013 that is meant to provide affected companies with an automatic refund of any fees unfairly charged to them.
Last night RBS said: “In some areas, in the aftermath of the financial crisis, we could have done better for some SME customers in GRG. We have apologised for this and taken steps — that the FCA agreed were appropriate — to put things right for our SME customers.”
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