RBS 'wilfully obtuse' in turnaround unit evidence: UK lawmaker

Tue Jul 22, 2014 12:38pm EDT
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LONDON (Reuters) - Royal Bank of Scotland (RBS.L: Quote) was "wilfully obtuse" when giving evidence to lawmakers examining whether its corporate turnaround division had been used to make money out of small businesses, the chairman of a British parliamentary committee said.

The Global Restructuring Group (GRG) unit deals with RBS's corporate clients who find themselves in financial distress and have missed or are in danger of missing debt repayments. It is meant to work with companies to help them return to health.

RBS's Deputy Chief Executive Chris Sullivan and GRG head Derek Sach told the Treasury Select Committee that the division was not used as a "profit centre" when they gave evidence in June, contradicting the findings of a report by former Bank of England Deputy Governor Andrew Large.

However, in a letter to committee chairman Andrew Tyrie published on Tuesday, Sullivan said RBS now accepted Large's description.

"With regard to the term of 'profit centre' we wish to make clear we do not disagree with the way that accounting term was used by Andrew Large in his report," Sullivan said in the letter.

Tyrie said RBS had made a "belated U-turn", having initially branded the description as "totally inappropriate".

"It now appears that RBS has been wilfully obtuse with the committee. If this is how RBS deals with a parliamentary committee, how much can customers and regulators rely on it to be straightforward with them?" he said in a statement.

Tyrie said he would be writing to RBS Chairman Philip Hampton on the matter and the committee would report on it after the summer.

RBS declined to comment on Tyrie's remarks.   Continued...

A logo at a Royal Bank of Scotland (RBS) branch is seen in the City of London March 6, 2013. REUTERS/Toby Melville