Activist group calls watchdog’s RBS report ‘a whitewash’

Businesses have branded a report into Royal Bank of Scotland’s treatment of small firms a “whitewash” and have threatenedlegalactionagainst the Edinburgh financial giant to claim compensation.

The Financial Conduct Authority (FCA) has said it is to investigate further allegations against RBS following an independent review of its dealings with around 12,000 customers. The City watchdog published an interim report which identified a number of shortcomings at the bank. However, it said that the most serious allegations against RBS were not upheld.

But RGL Management – a company formed for the purpose of suing RBS over the alleged actions of GRG – said the FCA’S report was “making excuses” and threatened legal action against the bank.

The inquiry, which looked at the bank’s dealings with customers who were part of RBS’S now-defunct Global Restructuring Group (GRG), identified a range of problems including “a failure to support SME businesses” and “a failure by RBS to adopt adequate procedures concerning the relationship with customers”.

RGL Management chief executive James Hayward said: “We have always said that the FCA report will be a whitewash and that now looks to be the case. The FCA is making excuses in its interim report as to why it cannot bring the bank to justice, which does nothing to help redress the devastation inflicted on business owners.

“If the FCA cannot, or will not, take action against the bank, then it is important for distressed businesses and individuals to seek justice in the courts.”

Mike Cherry, Federation of Small Businesses National Chairman, said: “What really matters now is that GRG victimsreceivethecompensation they’re due.”

Andrew Bailey, FCA chief executive, said the “Skilled Person’s” report identified “other concerns” about the treatment of SME customers, but that the most serious allegations against the bank had been dismissed. Skilled Person’s reports are commissioned by the FCA to diagnose and monitor issues in firms.

It was claimed RBS forced small firms which were facing financial trouble into the GRG unit, where it was said to have charged high lending fees and profited by buying up properties belonging to the firms at discounted prices.

Mr Bailey said: “Given the seriousness of the allegations against RBS it was appropriate for us to look at their treatment of SME customers. RBS has since taken voluntary steps, such as its proactive review of complex fees, and setting up a complaints scheme for eligible SME customers, overseen by an independent monitor.”

He added: “We are investigating the matters arising from the Skilled Person’s Report and are focussing on whether there is any basis for further action within our powers.”

Ross Mcewan, RBS chief executive, apologised for the failings and pointed to the Fca’sremarksthattheremediation steps announced by RBS were “appropriate”. He added: “The culture, structure and way RBS operates today have all changed fundamentally.”