Overhaul of condemned RBS business unit dismissed by MPs as mere ‘rebrand’

MPs have this week renewed their criticism of Royal Bank of Scotland after it emerged that nearly all of the senior staff currently employed in the bank’s turnaround unit for small businesses today also worked in the now disgraced Global Restructuring Group, which was condemned by the Financial Conduct Authority last week for “widespread inappropriate” mistreatment of small businesses.

The Treasury Select Committee, whose leader last week branded the Edinburgh-based lender’s conduct “disgraceful”, said information provided by RBS now shows 30 of the 32 current employees at senior manager grade or above within the bank’s new restructuring division previously worked in the GRG.

The still 72 per cent state-owned banks also revealed that that 136 of 182 – 75 per cent – of total current RBS Restructuring employees also previously worked in the GRG.

Nicky Morgan, chairman of the crossparty group of MPs, said the discovery suggested the turnaround division’s overhaul may have been a mere “rebranding exercise”.

She said: “Mr McEwan (RBS chief executive Ross Mcewan) has assured the committee that the culture at RBS Restructuring is fundamentally different from that of GRG.

“The discovery that almost all the senior management in the new unit previously worked at GRG raises concerns there has merely been a rebranding exercise.”

Meanwhile, the committee noted that just £1 million has so far been paid out in direct loss claims to those businesses affected by RBS’s conduct.

At current levels, the total projected to be payout as a result of what one MP described in the House of Commons last month as “largest theft anywhere, ever”, will only be £5 million – far less than the £280 million set aside by the bank for GRG complaints.

Addressing this issue, Ms Morgan added: “To provide confidence that fair and reasonable compensation is being provided, decisions on consequential loss must be subject to independent oversight.

“RBS shouldn’t be marking its own homework.”