RBS vows probe into claim it profited from ‘distress’

Royal Bank of Scotland’s boss said he did not believe it had conducted a “systematic” effort to profit from its troubled business customers.

RBS, which is 82% owned by the UK government, has been accused by a government adviser of pushing struggling small firms into its “turnaround” unit, so it could charge higher fees and interest, and take control of their assets.

CEO Ross McEwan said yesterday a review into business practices at its global restructuring group would 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,” he 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.”

Britain’s serious fraud office is monitoring the situation, and the Financial Conduct Authority is assessing the allegations.

On Monday, RBS appointed law firm Clifford Chance to conduct a review. Mr 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 Financial Conduct Authority.

* Reuters