RBS rejects calls for more cash to compensate small businesses
LONDON – Royal Bank of Scotland has rejected calls to beef up a 400 million pound ($502 million) scheme to reimburse customers who say they were mistreated by the bank’s business restructuring division.
Andrew Tyrie, a politician who chairs parliament’s Treasury Select Committee, wrote to the bank asking if the amount was too low because a customer action group planning to sue the bank already has claims worth 2 billion pounds.
Chief Executive Ross McEwan replied saying the money was to repay sales charges that should have been explained more clearly and was not intended to repay large numbers of customers who say the bank deliberately pushed their companies into administration.
“It is highly unlikely that businesses suffered material financial distress as a result of the bank’s actions,” McEwan said in his letter to Tyrie, which the politician published on Friday along with his letter to McEwan.
RBS’s Global Restructuring Group (GRG) has been accused of pushing some companies into bankruptcy so it could pick up their assets more cheaply.
The state-backed bank has admitted some wrongdoing over its handling of small businesses, but has said there was no evidence it pushed companies into bankruptcy.
Tyrie wrote a separate letter to Britain’s financial regulator asking the watchdog to fix a publication date for its long-delayed review into the allegations.
Andrew Bailey, chief executive of the Financial Conduct Authority (FCA) replied to Tyrie saying the FCA would publish a full account of its findings on GRG once it had completed investigations into issues raised by the so-called “skilled person” review conducted by consultancy Promontory Financial Group. Bailey’s reply was made public by Tyrie.
The FCA had hoped to publish its findings by the end of 2016. It said in November it found no evidence of systemic wrongdoing.
“The FCA will provide a further update on this matter when it is in a position to do so and will publish a full account of its findings when practicable once our work is concluded,” Bailey said in his letter to Tyrie.
Bailey’s letter also said nothing in the information related to GRG reported by Buzzfeed and BBC Newsnight in October “materially changes the findings of the skilled person that we announced in November 2016”. BBC and Buzzfeed had reported that the documents leaked by a whistleblower supported allegations that RBS tried to profit from struggling businesses. -Reuters