RBS bank to com­pen­sate SMEs over ‘mis­takes’

The Myanmar Times - - International Business -

BRI­TISH bank RBS will pay out £400 mil­lion (US$495 mil­lion) to com­pen­sate some of its busi­ness cus­tomers amid al­le­ga­tions of mis­treat­ment fol­low­ing the global fi­nan­cial cri­sis.

Royal Bank of Scot­land pledged to au­to­mat­i­cally re­fund “com­plex fees” paid by small and medium-sized busi­nesses trans­ferred to its Global Re­struc­tur­ing Group (GRG) be­tween 2008 and 2013.

The bank, which was bailed out by the Bri­tish govern­ment dur­ing the fi­nan­cial cri­sis and is still 73 per­cent state-owned, has been ac­cused of prof­it­ing from the mis­for­tunes of fail­ing firms it claimed to be help­ing dur­ing that pe­riod.

RBS said it set up the GRG for com­pa­nies which were show­ing signs of fi­nan­cial dif­fi­culty, and has de­nied it pushed some toward liq­ui­da­tion for its own gains.

But in a state­ment is­sued on Novem­ber 7 the bank ac­knowl­edged it “could have done bet­ter” for those firms.

RBS chief ex­ec­u­tive Ross McEwan ad­mit­ted that “mis­takes were made”, adding, “Some of our cus­tomers went through what was a trau­matic and painful ex­pe­ri­ence as a re­sult of the cri­sis.

“I am very sorry that we did not pro­vide the level of ser­vice and un­der­stand­ing we should have done.”

The bank said it was set­ting aside £400 mil­lion in the fourth quar­ter of the year to com­pen­sate GRG cus­tomers and re­view its com­plaints process.

The pe­riod con­cerned was “a very chal­leng­ing time” with an un­prece­dented num­ber of busi­nesses strug­gling, ac­cord­ing to RBS which said it lost £2 bil­lion in loans to com­pa­nies which sub­se­quently failed. –

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