"Financing projects from £50,000 to £100 million"

RBS to face review into SME mistreatment allegations

RBS to face review into SME mistreatment allegations

The Royal Bank of Scotland is to face a review from two firms appointed by the city regulator regarding its treatment of small businesses as highlighted in the Tomlinson Report.

The Financial Conduct Authority has ordered an independent review into the bank’s practices, which will be carried out by Promontory Financial Group and the accountants, Mazars.

The bank was accused of mistreating small business customers in a report penned by Lawrence Tomlinson in November.

Mr Tomlinson has alleged that the bank plotted the downfall of some of its business customers in order to profit from their failure.

“Good” and “viable” small firms were pushed into the Global Restructuring Group division (GRG), he said, where a combination of high fees and interest rates drove them into disrepair.

In this way, the bank could profit from their distress by setting large fines and seizing assets for its own “vast property empire”, Mr Tomlinson said.

One particular sector was of interest to the bank, it was revealed, as the “West Register” portfolio run by the bank’s restructuring group had generated £276 million from the assets of property development firms.

In the first instance, the review will assess RBS' relationship with a sample of small businesses that were referred to the restructuring group on account of their financial situation.

It will test the validity of the claims and look for evidence of "widespread and systematic" mistreatment by the bank.

In the event that the claims are substantiated, the review must investigate why this happened and draw up a list of recommendations to ensure that the bank changes its ways.

Monday, 20 January 2014 13:13
Bookmark and Share

Make a comment on this article

Comment
Please enter the following letters in the box below.
We're very sorry for this but we just need to ensure
that you are not a computer.