‘Whitewash’ claims over report on RBS business loans unit
The Financial Conduct Authority (FCA) said that although there were “instances of inappropriate customer treatment” within the bank’s Global Restructuring Group (GRG), it found no evidence that senior bankers lacked honesty or integrity.
The FCA’s final report has attempted to draw a line under a five-year scandal that saw officials accused of failing to take action against poor practices at the division, which dealt with troubled borrowers.
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Hide AdFirms claimed they had been undermined and stripped of their assets after they were transferred into the GRG between 2008 and 2013.
Previously, the FCA has said it was unable to investigate the GRG because its work was outside the regulator’s remit. But yesterday’s final report into the scandal said new rules mean that in future similar situations would fall under its regulation.
However, the 78-page report failed to say whether the FCA would have been able to bring a successful case against the GRG’s managers, even with the new powers.
RBS chairman Sir Howard Davies said the bank has acknowledged that some SME customers did not receive the treatment they should have done and has apologised.
But he added: “The FCA has once again confirmed that no evidence was found to support allegations that RBS artificially distressed and transferred otherwise viable businesses to GRG or deliberately made them worse off to profit from their sale, restructuring or insolvency.”.
Davies said the bank was focused on “putting things right” for affected customers through its complaints process and added: “The way the bank deals with business customers in financial difficulty today is fundamentally different to the aftermath of the financial crisis, during what was a hugely challenging time for the bank, its customers and the wider economy.”
But the FCA’s attempts to end the saga were met with derision, with the All-Party Parliamentary Group on Fair Business Banking (APPG) calling it a “whitewash”.
Kevin Hollinrake MP, co-chairman of the APPG, said: “This report is another complete whitewash and another demonstrable failure of the regulator to perform its role.”
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Hide AdThe Federation of Small Businesses said the report “failed to provide consolation to former GRG customers who lost everything”.
FCA chief executive Andrew Bailey said he acknowledged the “distress” felt by many of GRG’s customers. “I know that many customers of GRG therefore disagree with our decision to not take enforcement action, but I hope that this report will explain why we reached that decision.”