Allegations that Royal Bank of Scotland Group Plc pushed small businesses into default will be investigated as the British markets’ regulator called on other banks to review their lending practices.
The Financial Conduct Authority will consider whether to take action against the Edinburgh-based bank after a review by independent analysts, the watchdog said in a statement yesterday. The London-based regulator will also write to other banks asking them to confirm that they “do not engage in any of the poor practices alleged” against RBS in a report this week.
ritain’s largest state- owned bank would charge companies advisory fees and buy their assets at reduced prices once they were in default, government consultant Lawrence Tomlinson said in a report published on Nov 25.
Business Secretary Vince Cable referred the matter to the FCA and Bank of England Governor Mark Carney called the reports “deeply troubling and extremely serious”.
The probe adds to the list of regulatory issues RBS is dealing with.
RBS suspended two traders recently following an internal probe into alleged currency manipulation and handed over the emails of a former senior dealer to the FCA.
The bank was fined about €450.5 million in February for rigging the London interbank offered rate and similar benchmarks, and has set aside more than £2.7bn to compensate customers for improperly sold payment-protection insurance.
RBS hasn’t found any evidence of “systemic fraud,” the lender said in an e-mailed statement about Tomlinson’s report.
“These claims have done damage to RBS’s reputation and threaten to undermine our ability to build trust with customers and to increase lending to businesses in the UK economy,” Linda Harper, a spokeswoman for RBS, said in the statement. “We need to get to the facts as quickly as possible.”
The British Serious Fraud Office is considering a criminal probe over the allegations. The London- based agency has interviewed people connected to British businesses affected by RBS’s loans in recent weeks, a person with knowledge of the case has said.
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