RBS bank to compensate SMEs over ‘mistakes’
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. –