Bank eager to resolve issues
RBS offers £400m for ‘trauma’ to small firms
The move comes amid allegations of malpractice at its small business restructuring division.
Hundreds of small businesses are seeking redress over allegations that the Global Restructuring Group forced them out of business so it could pick up their assets cheaply.
Today the taxpayer-owned bank has admitted shortcomings in the way GRG handled small businesses, but it stopped short of claims they were deliberately pushed into administration.
RBS is introducing a new complaints process for those customers, overseen by retired High Court Judge, Sir William Blackburne.
In a statement issued this morning chief executive Ross McEwan said: “We have acknowledged for some time that mistakes were made.
“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.
“Although the Financial Conduct Authority (FCA) review into the historical operation of GRG continues, we believe that now is the right time to deal with the areas where we accept some customers were let down in the past.”
There will also be an automatic refund of complex fees paid by SMEs in the UK and the Republic of Ireland that were customers at that time.
SNP treasury select committee member George Kerevan was unimpressed by the regulator’s ‘selective’ response to a report on the issue, accusing it of being ‘manipulative’.
The committee today questioned Andrew Bailey, chief executive of the FCA, which regulates banks in the UK.
Much of the questioning involved RBS and the report from the FCA on the GRG unit conducted by Promontory Financial Group, the consultants, and Mazars, an audit firm. A precis of the findings of this still-unpublished investigation was published by the FCA this morning.
Mr Kerevan (right) said: “For the FCA to spring before the Treasury Select Committee – at a few hours’ notice – a highly selective comment on a report into the RBS/GRG scandal that the regulator is trying to avoid publishing in full, is deeply manipulative.
“Worse, it can be construed as trying to negate the appalling facts regarding the mishandling of small business customers uncovered by the independent “skilled person’s” investigation conducted by Promontory for the FCA.
“The FCA defends its action by implying it was trying to force RBS itself to agree to an early publication of the main findings of the Promontory investigation. However, the obvious leaking of market sensitive information about the proposed GRG redress mechanism suggests that somebody with a vested interest was playing the FCA at its own game.
“The FCA has asked RBS to conduct an inquiry into the leak. I think that suggests where the FCA thinks the blame for this leak lies. Once again it is the public and those who suffered under GRG who are being short changed.
“I will not let the matter rest there. It is imperative that the FCA lets the Treasury Select Committee have sight – even in private – of the full Promontory report so we can assess if there has been wrongdoing.”
Mr Kerevan went on: “As chair of the All Party Parliamentary Group on Fair Business Banking, I am heartened and encouraged by the statement from Andrew Bailey, head of the FCA, to today’s Treasury Select Committee, in which he publicly supported the call from the APPG for a new, permanent, independent and robust redress mechanism for business customers faced with bank mis-selling or misconduct.
“The problem to date with redress systems for unregulated products, especially those involving interest rate swaps, is that they are ad hoc and frequently fail to provide access for complainants to vital bank information.
“I agree with Mr Bailey that we need to create a new tribunal system, or equivalent, on a statutory basis and with teeth, to make banks supply the necessary records and information required for justice to be obtained.
“With this backing from the FCA, the APPG will be approaching the government to progress action to create a new, permanent redress system. At the same time, I welcome Mr Bailey’s assurance that the FCA will be seeking to embed transparency at the heart of the system of redress being created to deal with the fallout from the RBS/GRG scandal.”