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FCA appoints firms to carry out RBS past business review

The FCA has appointed Promontory Financial Group and Mazars to carry out a past business review of Royal Bank of Scotland’s treatment of business customers in financial difficulty.

The regulator announced in November that it had agreed with RBS that a section 166 report, or skilled persons review, should be carried out following claims the bank put viable businesses into default so it could make more profit.

The claims were alleged in a report by Dr Lawrence Tomlinson, one of Business Secretary Vince Cable’s key advisers, and centred on a part of RBS called the Global Restructuring Group, which was set up to help struggling companies.

Firms said GRG imposed fines, hiked interest rates and withdrew loans and that RBS’ property arm West Register then bought their properties at a fraction of their value.

In an announcement today, the FCA says the first stage of the review will consider RBS’ treatment of a sample of customers referred to GRG.

It says this will include some cases where customers have already raised concerns with Dr Tomlinson, the Department of Business, Innovation and Skills and the FCA.

The review will also consider whether any poor practices identified are widespread and systematic. If this is the case, the second stage of the review will identify the root cause of these issues and make recommendations to address any shortcomings.

The FCA expects to publish the outcomes from the review in Q3 2014.

Commercial lending is not a regulated activity under the Financial Services and Markets Act. But the FCA says if the review uncovers issues which come under its remit, it will consider further regulatory action.

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