Royal Bank of Scotland boss Ross McEwan has admitted that a past claim its controversial restructuring unit turned around the vast majority of small businesses it worked with was not true.
The bank chief executive spoke as he and chairman Howard Davies faced questions from MPs on the Treasury Select Committee over the state-backed lender’s treatment of small firms during and after the financial crisis.
RBS’s Global Restructuring Group (GRG) handled more than 12,000 struggling firms between 2007 and 2012 – some of which have accused the bank of pushing them into bankruptcy to pick up their assets on the cheap.
Mr McEwan was questioned by committee chair Nicky Morgan about a statement he had made in 2014 following a report into GRG’s conduct by law firm Clifford Chance.
“In that statement you said that GRG ‘turns around the vast majority of businesses that it works with’. That isn’t true, that wasn’t true, was it?” Ms Morgan said.
Mr McEwan replied: “In 2014, absolutely, when you look at the stats that have come through… it is not true.”
He was referring to figures from a subsequent report into GRG that was commissioned by the Financial Conduct Authority (FCA), the City watchdog.
RBS, which remains more than 70% owned by the taxpayer after its bail-out during the financial crisis, has been dogged by persistent questions and criticism over the affair.
The FCA in 2016 effectively cleared the bank of many of the allegations by customers.
RBS, which has set aside £400m to handle complaints by firms over their treatment by GRG, has admitted failings but stopped short of saying companies were deliberately pushed into administration.
Mr McEwan reiterated the position in his evidence before MPs, admitting: “We did not do a good job with these customers and the report shows that.
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“Our communication with our customers was very poor, the movement of them into GRG was very, very confusing for them – it created stress at a time when they were under enough stress as it was.
“Certainly the fees and the structuring and complexity of fees for SMEs [small and medium enterprises] was just too confusing and far too complex and very, very poorly communicated.”
Source: SKY News