UK watchdog says RBS should accept small businesses treatment report findings
RBS has sent a letter to MPs outlining concerns over aspects of the interim report.
The head of Britain’s financial watchdog said it is “unfortunate” that Royal Bank of Scotland (RBS) has disagreed with findings from its report over the bank’s treatment of small businesses which were shifted into its controversial Global Restructuring Group (GRG).
RBS chief executive Ross McEwan has written to MPs outlining a number of “concerns” over the methodology and approach of the report.
But Financial Conduct Authority chief executive Andrew Bailey told MPs on Tuesday that the bank should have accepted its findings, and blamed those disputes for delaying the release date of the interim report.
“I think the report is strongly critical of RBS and I think it is, frankly, unfortunate that RBS have not in a sense accepted that, I think, more readily,” Mr Bailey told the Treasury Select Committee.
“I think they should do, because a lot of … time and a lot of effort and a lot of work has been done on this.”
Mr McEwan said in his letter that RBS does “clearly acknowledge” that the bank could have “done better” for business customers shifted into GRG, and that some of those shortcomings “would have been widespread”.
“The bank does not agree that the evidence relied upon by the Skilled Person substantiates the key finding that the bank is guilty of ‘widespread inappropriate treatment of customers’,” he said, adding that there was no distinction drawn between process failings and conduct failings.
“Taken together, these approaches result in misleading conclusions likely to be misunderstood as suggesting that the bank was guilty of serious conduct failings and that these led to poor outcomes for customers.”
The bank also disputed the suggestion that GRG is likely to have caused material financial distress in up to 11% of all cases.
“We do not accept that there was any causal link between the actions by the bank and the insolvency of any of those businesses,” the banking boss said.
MPs have asked the FCA look into whether they can release the methodology behind that figure.
The FCA released its much-awaited interim report into GRG’s action last week, which identified a number of failings at RBS, but said the bank had not engaged in the “systematic inappropriate treatment of customers”.
It has so so far refused to publish the report in full, claiming that it would reveal confidential information about individuals, instead offering a detailed summary.
The state-backed lender has been dogged by allegations that it intentionally pushed businesses towards failure in the hopes of picking up their assets on the cheap.
Last November, RBS said it would put aside £400 million as part of a plan to refund small and medium-sized businesses following allegations that they were mistreated by GRG.
The lender said the funds will go towards both an “automatic refund of complex fees” paid by such firms between 2008 and 2013, as well as the operational costs of a new complaints process.
The FCA said it is still investigating RBS.