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RBS faces 'further action' by financial regulator | RBS faces 'further action' by financial regulator |
(35 minutes later) | |
The financial regulator has said it may take "further action" over the way Royal Bank of Scotland mistreated some small business customers. | The financial regulator has said it may take "further action" over the way Royal Bank of Scotland mistreated some small business customers. |
The Financial Conduct Authority has published an interim report into failings by the RBS division that dealt with struggling businesses. | The Financial Conduct Authority has published an interim report into failings by the RBS division that dealt with struggling businesses. |
The Global Restructuring Group was found to have "widespread" mistreatment of customers in some areas. | The Global Restructuring Group was found to have "widespread" mistreatment of customers in some areas. |
RBS said it had acknowledged failings and again apologised for its mistakes. | RBS said it had acknowledged failings and again apologised for its mistakes. |
The report identified a number of failings, including that 92% of viable firms handled by GRG suffered "inappropriate action", such as interest charges being raised or unnecessary fees added. | The report identified a number of failings, including that 92% of viable firms handled by GRG suffered "inappropriate action", such as interest charges being raised or unnecessary fees added. |
It was cleared in others, according to the report prepared for the regulator. | It was cleared in others, according to the report prepared for the regulator. |
FCA chief executive Andrew Bailey said: "We are investigating the matters arising from the [report] and are focussing on whether there is any basis for further action within our powers." | |
The bank has set aside £400m for compensation and paid out £115m, chief executive Ross McEwan said. | |
The BBC reported on a leaked copy of the report in August, leading to political pressure on the FCA to publish more of the findings. | The BBC reported on a leaked copy of the report in August, leading to political pressure on the FCA to publish more of the findings. |
The regulator was initially reluctant to do so, but gave in to pressure from MPs and campaigners. | The regulator was initially reluctant to do so, but gave in to pressure from MPs and campaigners. |
GRG operated from 2005 to 2013 and at its peak handled 16,000 companies. | GRG operated from 2005 to 2013 and at its peak handled 16,000 companies. |
But Mr McEwan said the "most serious allegations made against the bank have not been upheld". | But Mr McEwan said the "most serious allegations made against the bank have not been upheld". |
That includes finding the bank did not set out to engineer ways of transferring customers to GRG, or make requests of directors that were "unnecessarily burdensome". | |
"The culture, structure and way RBS operates today have all changed fundamentally since the period under review," he said. | "The culture, structure and way RBS operates today have all changed fundamentally since the period under review," he said. |
'Not before time' | |
The bank has dealt with more than 900 complaints going back a decade, Mr McEwan added. | The bank has dealt with more than 900 complaints going back a decade, Mr McEwan added. |
However, the report found that inappropriate treatment of small business customers was "widespread" in areas including: | However, the report found that inappropriate treatment of small business customers was "widespread" in areas including: |
It also found senior GRG managers were encouraged to place "financial objectives first and emphasised the need for continuing financial performance". | |
Nicky Morgan, who chairs the Treasury select committee, said: "It has taken the FCA too long to publish its summary of the skilled persons' report, so this is not before time." | Nicky Morgan, who chairs the Treasury select committee, said: "It has taken the FCA too long to publish its summary of the skilled persons' report, so this is not before time." |
Mr Bailey is due to appear before the committee on 31 October. | |
Bill Esterson, Labour's shadow business minister, called for a judge-led enquiry. | |
"The news of a police investigation last week is also an important step in ensuring the truth is discovered as part of a full and transparent process," he said. | |
"Trust between small businesses and our financial institutions needs to be restored because their relationship is key to the success of the UK economy." |