Thursday 14 December 2017

UK official to meet unhappy Ulster Bank business customers

Complaints of alleged malpractice ‘mirror’ those at RBS

RBS headquarters in London
RBS headquarters in London

Greg Harkin

COMPLAINTS about how Ulster Bank allegedly mistreated business customers here “mirror” those investigated in Britain, a senior UK government adviser has told the Irish Independent.

Lawrence Tomlinson, a special adviser to Britain’s business minister Vince Cable, says he will be “happy” to give a copy of his next report on the crisis-hit bank to Finance Minister Michael Noonan.

Dr Tomlinson is due to arrive in Belfast  this week where more than 40 Ulster Bank customers from all over Ireland will meet him to discuss alleged malpractice by the financial institution, which is 81pc owned by the British government.

In a damning report last November, Dr Tomlinson, who runs a care home empire, said customers of Ulster Bank’s

parent company the Royal Bank of Scotland (RBS) believed their viable businesses had been deliberately shut down so the bank could make more money out of them.

One major focus of his report was the operations of the bank’s Global Restructuring Group (GRG), a specialist ‘work-out’ unit into which ‘at risk’ customers are put.

However, many business  customers of both RBS in Britain and Ulster Bank here have argued they could have survived had they not been put into GRG.

The  restructuring group also imposed extra charges on customers for just being in a ‘work-out’, with many Irish businesspeople saying they are either in legal actions or planning legal actions as a result.

“The issues I am hearing from customers in Ireland in regards to Ulster Bank very much mirror what I have heard from businesses across the UK. The key concern remains the decision to move businesses into GRG and their subsequent treatment,” Dr Tomlinson said.

In the UK, the Financial Conduct Authority (FCA) said on Friday that it had started its independent review of RBS’s treatment of business customers. The Promontory Financial Group and Mazars will conduct the report.

The regulator said the two groups would conduct an independent skilled persons report under section 166 of the UK Financial Services and Markets Act (FSMA) 2000, which will examine RBS's treatment of business customers in financial difficulty.

Officials from the Department of Finance here met Ulster Bank executives in Dublin on the orders of Mr Noonan after the Tomlinson report was issued. However, no one from the department contacted either Dr Tomlinson or Ulster Bank customers.

“The FCA has ordered a section 166 investigation into the concerns raised in my report. I really hope that this investigation gets to the bottom of what is really happening in GRG, whether it is truly a turnaround division, whether they are treating their customers properly and whether there is a conflict of interest with having the West Register property division of the bank based within GRG,” said Dr Tomlinson

West Register is the company in which property seized by Ulster Bank is placed before being sold on.

Dr Tomlinson added: “In the long run, I would like to see more competition in the banking marketplace to help prevent these types of scandals from happening in the future.

“Commercial lending remains an unregulated activity and often lacks available lines of redress for businesses, many therefore feel their grievances are not being effectively dealt with.

“The business-bank relationship is one of trust, and that trust has eroded greatly in the period following the crash,” he added.

“Coupled with little competition in the commercial lending market, there is also nowhere for them to move to when theses grievances occur, rendering them unable to move and at the behest of the very bank they are complaining about.”

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