LONDON (Reuters) - Royal Bank of Scotland’s (RBS.L) boss said he did not believe the UK state-backed bank had conducted a “systematic” effort to profit from its troubled business customers.
RBS, which is 82 percent owned by the government, has been accused by government adviser Lawrence Tomlinson of pushing struggling small firms into its “turnaround” unit, so it could charge higher fees and interest, and take control of their assets.
Chief Executive Ross McEwan said on Wednesday a review into business practices at its global restructuring group (GRG) will consider the allegations and take action if needed.
“The most serious allegation that has been made is that RBS conducted a ‘systematic’ effort to profit on the back of our customers when they were in financial distress,” McEwan said in a statement.
“We do not believe that this is the case, but it has nonetheless done serious damage to RBS’s reputation.
“No evidence has been provided for that allegation to the bank. The review will investigate the claim fully and I will report back on its findings,” he said.
Britain’s Serious Fraud Office said it was monitoring the situation, and the Financial Conduct Authority (FCA) is assessing the allegations.
RBS on Monday appointed law firm Clifford Chance to conduct a review and Business Secretary Vince Cable has demanded an urgent response from the bank and Britain’s financial regulator.
McEwan said the review will be delivered by the end of January and will have access to whatever information it needs and the bank will address any shortcomings identified.
RBS said Jon Pain, its head of conduct and regulatory affairs, will oversee the review and the bank will share findings with the FCA and co-operate with any investigations it or the Prudential Regulatory Authority conduct.
Reporting by Steve Slater; Additional reporting by Huw Jones; Editing by Elaine Hardcastle