31st Jul 2018 11:08
LONDON (Alliance News) - The Financial Conduct Authority said Tuesday that it does not have powers to discipline tax-payer owned Royal Bank of Scotland Group PLC over its mistreatment of small and medium-sized enterprise customers.
According to a unredacted government report released in February, the bank's business turnaround division Global Restructuring Group mistreated struggling business customers by increasing interest rates and charges and imposing unnecessary fees on many of its clients, eventually forcing them into bankruptcy so it could buy out their assets more cheaply.
"It is important to recognise that the business of GRG was largely unregulated and the FCA's powers to take action in such circumstances, even where the mistreatment of customers has been identified and accepted, are very limited. Taking action was therefore always going to be difficult and challenging but after carefully considering all the evidence we have concluded that our powers to discipline for misconduct do not apply and that an action in relation to senior management for lack of fitness and propriety would not have reasonable prospects of success," said FCA Chief Executive Andrew Bailey.
"I appreciate that many GRG customers will be frustrated by this decision but we have explored all the options available to us before arriving at this conclusion. We feel strongly that those companies that have suffered loss as a result of how they were treated whilst in GRG must be appropriately compensated. We are closely monitoring the complaints process overseen by Sir William Blackburne, an independent third party, to ensure that things are put right," he added.
Shares in RBS were trading 0.9% higher at 255.80 pence each on Tuesday morning.
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