RBS sets aside £400m after FCA investigation into treatment of SME’s

The Royal Bank of Scotland is expecting to spend £400m in operating costs and refunds after failing to ensure struggling SME customers were treated fairly.

The Royal Bank of Scotland is expecting to spend £400m in operating costs and refunds after failing to ensure struggling SME customers were treated fairly.

 

The FCA launched an investigation into what happened to small to medium businesses who were transferred to RBS’s Global Restructuring Group (GRG) because they were in financial difficulty. 

 

Over two hundred cases covering a six-year period were examined. RBS provided Promontory, a third party who managed the review, with approximately 1.5million physical pages of information and 270,000 emails. 

 

It found that of the potentially viable SME customers transferred to GRG, most of them experienced some form of inappropriate action, though it was suggested that these actions did not result in material financial distress.

 

The Royal Bank of Scotland will now introduce a new complaints process and refund fees to business customers that were customers of GRG between 2008 and 2013, in a move which is expected to cost the bank £400millon. 

 

Ross McEwan, CEO of RBS said:

 

“We have acknowledged for some time that mistakes were made. Some of our customers went through what was a traumatic and painful experience as a result of the crisis. I am very sorry that we did not provide the level of service and understanding we should have done.

 

“The culture, structure and way RBS operates today is fundamentally different from the period under review. We have made significant changes to deal with the issues of the past, so that the bank can better support SME customers in financial difficulty whilst also protecting the bank’s capital.”