17th Apr 2014 12:07
LONDON (Alliance News) - Royal Bank of Scotland Group PLC Thursday said that a review it commissioned from law firm Clifford Chance to look into allegations that the bank had systematically setting out to defraud its small business customers, had found no evidence to support the "damaging and serious" allegation.
UK government adviser Lawrence Tomlinson alleged in a report last year that RBS forced small businesses in financial difficulty into its Global Restructuring Group. Tomlinson's report included accusations that RBS deliberately drove small businesses to collapse in order to buy their assets cheaply during the financial crisis.
"RBS appointed Clifford Chance to undertake a thorough and independent review of the central allegation made by Lawrence Tomlinson in his report that the bank, through its Global Restructuring Group, was guilty of systematically setting out to defraud its small business customers. Clifford Chance concluded that there was no evidence to support this damaging and serious allegation," RBS said in a statement Thursday.
However, the Clifford Chance report isn't then end of the matter.
A second report by former Bank of England deputy governor Andrew Large, published in January, noted that some small businesses had made "extreme accusations about RBS's handling of relationships with customers (particularly with respect to customers facing difficulties or distress)."
The reports prompted the UK government to review the matter to regulators, and in January the Financial Conduct Conduct Authority appointed Promontory Financial Group and Mazars to conduct a report investigating RBS's treatment of struggling businesses. The FCA expects to publish the outcome of that review in the third-quarter of this year.
"The trust that a bank has with its customers is fundamental. That trust was put at risk at RBS by the allegation of systematic abuse made in the Tomlinson report. I welcome the Clifford Chance findings which show no evidence of the serious and damaging allegation that we had set out to deliberately defraud our business customers," RBS Chief Executive Ross McEwan said in the bank's statement Thursday.
He defended the work of the bank's restructuring team and its handling of small businesses.
?Following the reckless lending that led up to the financial crisis, the bank?s shareholders and customers lost billions of pounds on bad loans. The bank, through its restructuring team, helped minimise those losses where it could, successfully turning round thousands of businesses, safeguarding hundreds of thousands of jobs. This required the bank to make incredibly difficult decisions, but our first priority then and now is to try and help our customers recover,?
RBS shares were up 0.3% at 301.00 pence Thursday afternoon.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
RBS.L