RBS to shut down its controversial turnaround division
Royal Bank of Scotland is shutting its controversial turnaround division and the two most senior executives who ran it are to leave the bank, a person familiar with the situation said.
Tasked with recovering loans from customers struggling to pay, the global restructuring group came under fire last year when UK government advisor Lawrence Tomlinson accused the division of pushing small businesses to collapse and then profiting from their demise.
An independent report commissioned by RBS, which is 81pc owned by the UK state, cleared the bank of attempting to defraud its customers. But RBS nonetheless said it would change the way it dealt with borrowers in distress and outlined new practices.
Staff were informed of the restructuring group's closure by email on Friday, the source said. The email also said that Derek Sach, who heads the division, and Aubrey Adams, who leads its property division, will both leave the bank on March 31, 2015.
Laura Barlow, who joined RBS in 2009, has been appointed to head up the new restructuring unit, which will be more integrated with the main bank than the restructuring group was, the source said. Customers will not see any change, beyond the strategies already outlined by RBS, he added.
RBS, led by chief executive Ross McEwan declined to comment.