RBS staff were offered bonuses to exploit small firms, according to leaked report
Management at the Royal Bank of Scotland (RBS) failed to address known failings in the turnaround division at the centre of an investigation, according to a leaked report seen by the press.
The Financial Conduct Authority (FCA), the city watchdog now undertaking a second inquest into claims RBS? Global Restructuring Group (GRG) deliberately pushed small firms into disrepair, has so far unpublished its initial report in full.
However, an early leak to the BBC suggested inappropriate action? such as interest rates being raised anddubious fees was encountered by 92 per cent of all businessesworking withthe GRG.
Now, a leaked copy of the full report, seen by the Daily Mail, has revealed RBS staff were pressured to mislead small business owners inside the GRG, and were offered financial incentives to deliver misinformation.
The FCA cited evidence of training material issued to GRG staff advising them to target basket cases. It is claimed the manual instructed staff to let customers hang themselves, and missed opportunities mean missed bonuses.
RBS has said the manual was an isolated incident.
According to the Daily Mail, staff were also encouraged to extract arbtitrary and complex? fees without explanation. The leaked report outlined nine major failings by RBS to address the practices, and claimed management were aware, or should have been aware? of the level of exploitation.
Around 140 firms are seeking damages from RBS, with the average claim against the bank reported to sit between 6m and 7m, totally 1bn overall.
Responding to the latest leak, LexLaw’s AlI Akram, a firm representing a number of the claimants, called for full publication of the report.
it is in the public interest for this document to be fully published, and such publication is likely to assist the companies and family businesses that were victims of GRG in deciding on litigation against RBS, he said.
The regulator itself came under pressure by the Treasury select committee of MPs to publish the report in full, after earlier summaries indicated greater damage than previously known.
According to board meeting minutes seen by The Times, the FCA concluded that publication would provoke the unacceptable risk of successful legal action by current/former RBS managers.
Criticising the watchdog’s position, Kevin Hollinrake, Conservative Party MP and vice-chairman of the parliamentary group on fair business banking, said: It is almost beyond belief that the regulator is living in fear of the banks that they are supposed to be regulating.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
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