RBS treatment of business customers was “disgraceful” say MPs as FCA report finally published

After months of denials and attempts to hide the findings of the Financial Conduct Authority’s probe into how Royal Bank of Scotland mistreated thousands of its small business customers, the report has now been made public, resulting in a group of influential MPs branding the bank “disgraceful”.

The Treasury Select Committee (TSC) invoked parliamentary privilege to publish the controversial FCA dossier, saying there was “overwhelming public interest” in the report and after it was widely leaked online and across social media.

The move comes after FCA chief executive Andrew Bailey was ordered by the TSC earlier this month to publish the document on the Global Restructuring Group, the banking giant’s now notorious restructuring arm.

However, Mr Bailey had efused, saying the release of the report had “proved impossible” for legal reasons.

The decision has now been overruled, ending years of allegations that the still 72 per cent state-owned RBS had intentionally pushed small businesses to the wall in order to strip them of assets at bargain prices in order to boost the bank’s own profits.

In a statement, TSC chair Nicky Morgan said: “The findings in the report are disgraceful.

“The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high interest rates, and the acquisition of equity and property.

“The committee has not taken the decision to publish lightly. Normally, reports prepared under section 166 are confidential, but there is overwhelming public interest in bringing transparency to what happened at GRG, given the earlier leak of the report.”

The GRG operated from 2005 to 2013 and at its peak handled 16,000 companies.

Companies were referred to it when they skipped a loan repayment or suffered a significant drop in sales or profits.

The contents of the report on the unit’s conduct was first leaked to the BBC in August last year.

While the FCA refused to publish the findings, the result of a vote taken by MPs on the Treasury Committee saw the decision to publish it taken meaning it has now become known that FCA investigators estimated only about a third of firms transferred to GRG were not viable.

Of those that may have been able to continue trading, the FCA found that one in six were damaged by GRG, with some struggling customers having interest charges raised or hit with new fees.

“Our central conclusions are that there was widespread inappropriate treatment of customers by GRG,” the report said.

It blamed “fundamental failings” in the management of the unit.

In particular, it says GRG put its own commercial interests ahead of the small and medium-sized firms it was looking after.

However, the report said that RBS did not move customers into the recovery unit for “inappropriate reasons”.

An RBS spokesperson said: “We are deeply sorry that customers did not receive the experience they should have done while in GRG.

“Although the most serious allegation - that we deliberately targeted otherwise viable businesses in order to distress and asset-strip them for the bank’s profit - has been shown to be without foundation, we know that the bank got a lot wrong in how it treated some customers in GRG during the financial crisis.

“The culture, structure and way RBS operates today have all changed fundamentally since the period under review and we have made significant changes to deal with the issues of the past, including how we treat customers in financial distress.

“We have accepted all the relevant recommendations from the report and our focus is now on rebuilding trust and supporting our customers.”