Law firm probe clears Ulster Bank

A major probe by a law firm found no evidence that Ulster Bank put viable companies out of business in order to seize their assets.

Dublin-based Mason, Hayes & Curran carried out the review of Ulster Bank’s Global Restructuring Group in the Republic of Ireland (GRGI) in the wake of widespread evidence in the UK and Northern Ireland that Royal Bank of Scotland’s Global Restructuring Group had systemically undermined viable businesses in order to take control of the underlying assets. Ulster Bank is a wholly-owned subsidiary of RBS.

In compiling the report, Mason Hayes & Curran reviewed 32 customer case studies, interviewed 39 staff members and reviewed 140,000 pages of customer files and 24 policy and procedures documents. Its main findings include no evidence to substantiate the principal allegation in the Tomlinson Report that GRG in Ireland engaged in “systemic and institutional” behaviour in artificially distressing otherwise viable businesses and, through that, putting business “on a journey towards administration, receivership and liquidation”.

It said that GRGI’s driving policy was to manage its customers ‘through the cycle’. It also found that GRGI sought to keep faith with the customer, provided that it viewed the customer’s business as viable and was receiving co-operation from the customer.

Moreover, insolvency remedies were only invoked against trading businesses as a last resort and a large degree of forbearance was shown by GRGI management.

“Our customers must be able to trust us and I welcome the publication of the independent report which found no evidence in Ulster Bank of the misconduct alleged to have occurred,” said Ulster Bank chief executive, Jim Brown.

“I take the accusations put forward in the Tomlinson report very seriously and I note that no evidence of such has been found by this independent review or provided to the bank. Dealing with customers in financial trouble is one of the most difficult things in banking and we will continue to do everything we can to improve the experience of those businesses that get into trouble.”

The Tomlinson Report was carried out in 2013 and commissioned by the UK Department of Business, Innovation and Skills. It was conducted by its entrepreneur in residence, Lawrence Tomlinson. The report concluded there was evidence of widespread inappropriate behaviour by RBS and recommended a further investigation.

A subsequent review by the legal firm, Clifford Chance, found no evidence that RBS had defrauded its customers.