RBS to compensate squeezed firms


The bank has announced a fund of £400m for affected firms, reports The BBC.

Its Global Restructuring Group (GRG) had been accused of buying assets cheaply from failing firms it claimed to be helping.

However, regulators found RBS did not “artificially engineer” the transfer of customers to GRG.

Last month, RBS said it had let some small business customers down in the past but denied it had deliberately caused them to fail.

On Tuesday, RBS chief executive Ross McEwan 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 bank will automatically refund complex fees paid by about 4,000 small business GRG customers between 2008 and 2013, and will set up a new complaints process.

The process will be overseen by retired High Court judge Sir William Blackburne. Complaints will initially be dealt with by the bank, and any that are not resolved will then be considered by the third party.

Customers who feel they have lost out may have to fight for redress through the courts.

Mr McEwan told the BBC: “It would be fair to say that consequential loss needs to go to the court at the end of the day, because it will be up to a court process in most of these situations for them to determine whether… those businesses were going to be viable, and be a very successful business going forward.”

In the case of businesses that have gone bust but are due compensation, it will be up to administrators to decide whether to reconstitute the firm, said RBS regulatory affairs officer, Jon Pain.

It may be the case that only creditors of a dissolved firm will benefit from any compensation, rather than the business owner, he said.