RBS ‘acted inappropriately’ towards firms

MORE than 90pc of firms put into the RBS division set up to restore struggling companies to health are understood to have suffered “inappropriate action” against them by the bank.

A leaked FCA report, which is the full version of a summary from November last year, claims 92pc of companies which entered RBS’S Global Restructuring Group (GRG) were mistreated in some way, such as through policy or procedural breaches. RBS has said the FCA made it clear the small business customers transferred to the GRG were “exhibiting clear signs of financial difficulty” and that in a “significant majority of cases, it was likely RBS’S actions did not result in material financial distress”.

The report was leaked to the BBC, which said just 10pc of the companies in the GRG returned intact to the main RBS bank. As of the end of 2014, the report is understood to say 69pc of firms were still in the successor to the GRG, which was supposed to return them to health. But sources close to the bank say the 10pc figure refers to the number of companies which went back to the main bank rather than returned to full health. This means that some companies which entered into the GRG could have paid off loans or moved to another lender.

The 361-page leaked report also reportedly says the bank only provided “narrow compliance” to investigators but RBS refuted this, saying it “co-operated fully with this complex and lengthy review” and provided 1.5m physical pages and 270,000 emails. It added it continued to work with the FCA and had launched a new complaints process overseen by an independent third party and an automatic refund for GRG customers.

RBS also acknowledged in the aftermath of the financial crisis, in some areas, it “could have done better for some SME customers in GRG”, highlighting that it could have managed the transition of small businesses from the main bank to the GRG better and explained more thoroughly “any changes to the prices or complex fees” GRG charged.