Royal Bank of Scotland has appointed law firm Clifford Chance to carry out an inquiry into allegations it put viable businesses into default so it could make more profit.
The FCA and Prudential Regulation Authority were yesterday handed a report by Business Secretary Vince Cable, written by one of his key advisers Lawrence Tomlinson, containing the allegations.
The claims focus on a part of RBS called the Global Restructuring Group, which was set up to help struggling companies.
But firms have told Tomlinson GRG imposes fines, hikes interest rates and withdraws loans. They claim RBS’ property arm West Register then buys their properties at a fraction of their value.
Also yesterday, Sir Andrew Large published the findings of a review into RBS’ SME lending practices, commissioned by the bank.
The review found that a “small proportion” of customers have a strongly negative perception of RBS, particularly relating to its treatment of customers in financial distress.
It recommended the bank look into these concerns carefully.
In a letter to Sir Andrew, published on RBS’ website, RBS group chief executive Ross McEwan says the review is “a tough read for the bank”.
He says: “Your report highlights that when times are tough for our customers, some have said they were angry about the treatment they received.
“As you say in your report, many are happy with the skills and expertise we provide at times of financial distress, but to ensure our customers can have full confidence in our commitment to them I have asked the law firm, Clifford Chance, to conduct an inquiry into this matter, reporting back to me in the new year.
“It is important that we get this right, especially as our regulators want the bank to remove problem loans more quickly.”