GRG: Financial watchdog says it is investigating controversial RBS unit’s treatment of small businesses further

RBS's Global Restructuring Group operated between 2005 and 2013. It has widely been accused of pushing some firms – which it was meant to be supporting – into bankruptcy for its own profit

Ross McEwan, chief executive of RBS, responded to the publication of the summary by saying that he was “pleased” the most serious allegations made against the bank had not been upheld (Getty)

The UK’s financial watchdog has published a summary of a report into the unit of Royal Bank of Scotland set up to help struggling businesses, concluding that the bank failed to support small companies and didn’t adopt adequate procedures concerning its relationship with customers.

The report examines RBS’s controversial Global Restructuring Group (GRG), which operated between 2005 and 2013. GRG has widely been accused of pushing some firms – which it was meant to be supporting – into bankruptcy for its own profit.

Known as the “skilled person’s report”, it was ordered by the Financial Conduct Authority in 2014 and was conducted by consultancy Promontory.

Monday’s publication of the summary follows weeks of mounting political pressure on the regulator to disclose its findings, and reveals that the FCA found that RBS had not engaged in “systematic inappropriate treatment of customers” but that further investigation is necessary.

“Commercial lending activity is largely unregulated in the UK but given the seriousness of the allegations against RBS it was appropriate for us to look at their treatment of SME [small and medium-sized enterprise] customers,” FCA chief executive Andrew Bailey said in a statement.

“RBS has accepted that it did not meet the standards it set for itself which impacted on how it treated some of its SME customers,” he said, adding that the bank had since “taken voluntary steps” to help protect small businesses, which he deems appropriate.

But Mr Bailey also said that the FCA was still conducting an investigation “focusing on whether there is any basis for further action within our powers”.

Ross McEwan, chief executive of RBS, responded to the publication of the summary by saying that he was “pleased” the most serious allegations made against the bank had not been upheld.

“We have acknowledged for some time that mistakes were made and have apologised that we did not always provide the level of service and understanding we should have done for these customers in the aftermath of the financial crisis,” he said.

“The regulator has again confirmed that the remediation steps we announced in November to address concerns for customers are appropriate.

“Any customer who feels they were treated inappropriately whilst in GRG should make use of the complaints process,” Mr McEwan added.

He said that the culture, structure and way RBS operates have changed “fundamentally” since the period under review.

But Nicky Morgan, chair of the Treasury Select Committee who earlier this month wrote to Mr Bailey demanding greater transparency on the issue of RBS and GRG, said on Monday that it had taken the FCA “too long” to publish the summary.

A spokesman for GRG Action Group, which represents more than 500 businesses, said: “It remains our belief that publication of this summary report is insufficient. If anything, today’s findings solidify the case for having the FCA’s report published in full so that the bank’s misdemeanours can be properly scrutinised.”