Royal Bank of Scotland Group’s denial over SMEs

Royal Bank of Scotland Group denied deliberately forcing the collapse of small business customers in the wake of the 2007 financial crisis after two news organisations published leaked internal documents.

The majority taxpayer-owned lender sought to make more money from small-and medium-sized enterprises that ran into trouble during the financial crisis as part of a project code-named ‘Dash for Cash’, according to documents published by the BBC and Buzzfeed News.

While Edinburgh-based RBS said in a statement that it failed to meet its standards and let some customers down, it denied deliberately forcing their collapse.

Britain’s largest lender to businesses is being probed by the UK’s Financial Conduct Authority after a UK government-commissioned report said the bank “artificially” distressed otherwise viable businesses in order to buy their assets at a discount.

The accusation is rejected by the bank and two separate investigations it sponsored.

“We have seen nothing to support the allegations that the bank artificially distressed otherwise viable SME businesses or deliberately caused them to fail,” RBS chief conduct and regulatory affairs officer Jon Pain said in the statement.

“In the aftermath of the financial crisis we did not always meet our own high standards and we let some of our SME customers down.”

RBS required a £45.5bn bailout from British taxpayers to avert failure during the financial crisis, as commercial and real estate lending soured while it recorded deep losses at its investment bank.

The bank has since offloaded assets worth more than £1trn as it shrinks from a global titan to focus on domestic consumer and business lending.

RBS’s former deputy chief executive officer Chris Sullivan, who now runs commercial lending operations at Banco Santander’s UK unit, was criticised by legislators for “willfully obtuse” evidence given to the UK parliament in 2014 relating to its global restructuring group.

While RBS later that year apologised for “any confusion” in the evidence, it reiterated that the global restucturing group didn’t boost profits at the expense of clients.

The FCA said last week it received the final report on RBS’s treatment of small firms from consulting firm Promontory Financial Group and the accounting firm Mazars, which it had asked to review the bank’s treatment of business customers.