Boss leaves as RBS brings curtain down on restructuring division

 

Royal Bank of Scotland is closing its hugely controversial Global Restructuring Group, with its boss leaving less than three weeks after he was accused of being “wilfully obtuse” in evidence to a parliamentary committee.

GRG, the division of the state-owned bank that dealt with corporate customers in financial difficulties, has been mired in controversy since government adviser Lawrence Tomlinson penned a sharply critical report accusing the unit of forcing viable businesses to the wall in order to make a profit for the bank.

A review by the City law firm Clifford Chance said it had found no evidence of that, but it did highlight a series of failings and a regulatory  investigation is continuing.

Derek Sach, the chief of the division, is now leaving, just weeks after being lambasted by the Treasury Select Committee. It also emerged that Aubrey Adams would depart on the same date. He had responsibility for West Register, the RBS property company that also came under fire in Mr Tomlinson’s report.

Mr Tomlinson said: “After the evidence I have received from businesses, and the truly upsetting circumstances many have found themselves in, I can only welcome today’s news about GRG. It is a bold but significant move by the bank, which should start the important process of rebuilding ... trust with the business community. The disbandment of GRG in its current form is a vital step towards creating a fairer banking system that treats its customers well.”

However, Andrew Tyrie, chairman of the Treasury committee, said: “The important issue here is whether RBS is now – and is seen to be – acting in the long-term interests of its shareholders and [small business] customers. This suggests that RBS still has a long way to go.”

Neil Mitchell, the former boss of IT firm Torex Retail, who is aiming to sue RBS over GRG, said: ”I find the timing of his [Mr Sachs’] exit intriguing given the recent statement made by Andrew Tyrie ...   concerning his obtuse behaviour when appearing before the parliamentary committee and that the investigation by the Financial Conduct Authority into the treatment of business customers by GRG is not yet concluded. I feel that this now puts the spotlight on the RBS chairman and CEO.”

RBS declined to comment on the departures or on whether they will receive pay-offs, although their official leaving date of 31 March suggests a long period of paid gardening leave.

Laura Barlow, who joined the bank in 2009, will now head restructuring and will be charged with implementing changes, some of which were called for in the Clifford Chance review and in a report commissioned by the bank on its handling of small business customers.

Silence from the bank on GRG is golden

Comment

James Moore

Ask yourself this: as the wave of criticism of GRG threatened to swamp Royal Bank of Scotland, why wasn’t the man who dominated it for more than two decades at least suspended?

The answer is that Derek Sach knows where the bodies are buried. One of banking’s great survivors, he is that rare thing, a holdover from Fred Goodwin’s era.

Having been accused of being “wilfully obtuse” before a parliamentary committee, the bank’s hand was in effect forced and so  Mr Sach is going. But what of a pay-off? It is in RBS’s interests that Mr Sach goes quietly and stays quiet.

Its “no comment” tells its own story.

Start your day with The Independent, sign up for daily news emails
Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
News
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
news
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before