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'Secret' report into RBS published 'Secret' report into RBS published
(35 minutes later)
After months of wrangling MPs have released a report by the financial regulator which said a unit of RBS of mistreated thousands of small firms.After months of wrangling MPs have released a report by the financial regulator which said a unit of RBS of mistreated thousands of small firms.
The Global Restructuring Group (GRG) was marketed as an expert service that could save a business, but according to the report took "inappropriate" action.The Global Restructuring Group (GRG) was marketed as an expert service that could save a business, but according to the report took "inappropriate" action.
The Financial Conduct Authority (FCA) had refused to publish the report, blaming legal reasons.The Financial Conduct Authority (FCA) had refused to publish the report, blaming legal reasons.
But after a meeting, MPs on the Treasury Committee voted to publish it.But after a meeting, MPs on the Treasury Committee voted to publish it.
Nicky Morgan, chair of the Treasury Committee, said MPs had not taken the decision to publish the report lightly, as normally such reports are confidential.Nicky Morgan, chair of the Treasury Committee, said MPs had not taken the decision to publish the report lightly, as normally such reports are confidential.
However, she said there was an "overwhelming" public interest in its publication.However, she said there was an "overwhelming" public interest in its publication.
"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," she 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," she said.
The Global Restructuring Group (GRG) operated from 2005 to 2013 and at its peak handled 16,000 companies.The Global Restructuring Group (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.Companies were referred to it when they skipped a loan repayment or suffered a significant drop in sales or profits.
But the FCA found that firms placed in the recovery group had a slim chance of emerging from it. 'Fundamental failings'
Many had interest charges raised or were hit with new fees, the report said. The report estimated that about a third of firms transferred to GRG were not viable.
Just 10% of firms returned to the main RBS bank. Of those that may have been able to continue trading, the FCA found that one in six had actually been damaged by GRG.
Some customers had interest charges raised or were hit with new fees, the report said.
"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".