RBS damned by watchdog
MPS turned up the heat on Royal Bank of Scotland yesterday after using parliamentary privilege to publish a regulator’s full report into its “disgraceful” treatment of struggling small businesses.
The Treasury select committee released the report after demanding that the Financial Conduct Authority publish or hand over the unredacted version by last Friday. The watchdog would not publish because it feared being sued.
The report, commissioned by the regulator in 2014 after allegations made by former RBS clients, found “widespread inappropriate treatment of SME customers” by the bank’s global restructuring group, which was meant to try to restore their fortunes after the financial crisis.
A document produced by a GRG team leader and widely circulated in at least one regional office contained a heading “Rope”, suggesting: Sometimes you need to let customers hang themselves.”
The report said: “This treatment did not stem simply from idiosyncratic behaviour on the part of individual GRG staff and managers. Rather, it resulted from a failure on the part of GRG and RBS to fully recognise and manage the conflicts of interest in GRG’s twin commercial and turnaround objectives.” Committee chair Nicky Morgan said they had not taken the decision to publish lightly, but there is “overwhelming public interest in bringing transparency to what happened”.
She said: “The findings in the report are disgraceful. The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high interest rates, and the acquisition of equity and property.”
An RBS spokesperson said: “We are deeply sorry that customers did not receive the experience they should have done while in GRG. The report makes for very difficult reading and some of the language used by our staff in the past was clearly unacceptable.
“Although the most serious allegation – that we deliberately targeted otherwise viable businesses in order to distress and asset-strip them for the bank’s profit – has been shown to be without foundation, we know that the bank got a lot wrong in how it treated some customers in GRG during the financial crisis.
“The culture, structure and way RBS operates today have all changed fundamentally since the period under review.”