Home news RBS faces 'further action' by financial regulator

RBS faces 'further action' by financial regulator


The financial regulator has said it may take “further action” over the way Royal Bank of Scotland treated some small business customers.The Financial Conduct Authority (FCA) has published an interim report into how a unit set up to help struggling businesses mistreated some clients.FCA chief Andrew Bailey said it was investigating whether there were grounds for action against the bank.RBS said it had acknowledged failings and again apologised for its mistakes. The bank’s Global Restructuring Group was found to have “widespread” mistreatment of customers in some areas, although it was cleared in others, according to the report prepared for the regulator.RBS chief executive Ross McEwan said the bank had set aside £400m for compensation and had paid out £115m.The BBC reported on a leaked copy of the report in August, leading to calls from MPs in recent weeks for the FCA to publish more of the findings. The report identified a number of failings, including that 92% of viable firms handled by GRG suffered “inappropriate action”, such as interest charges being raised or unnecessary fees added.’Not before time’GRG operated from 2005 to 2013 and at its peak handled 16,000 companies.But Mr McEwan said the “most serious allegations made against the bank have not been upheld”.”The culture, structure and way RBS operates today have all changed fundamentally since the period under review,” he said.The bank has dealt with more than 900 complaints going back a decade, Mr McEwan added.However, the report found that inappropriate treatment of small business customers was “widespread” in areas including:A failure to support small businesses in ways consistent with good turnaround practice
Placing an undue focus on price increases and debt reduction without considering customers’ longer-term viability
A failure to handle customer complaints fairly and to deal with certain conflicts of interest
Nicky Morgan, who chairs the Treasury select committee, said: “It has taken the FCA too long to publish its summary of the skilled persons’ report, so this is not before time.”The committee is carrying out its own assessment, which will report back later this week, she added.Mr Bailey is due to appear before MPs on the committee on 31 October.
Source: bbc