Earlier today, the Treasury Select Committee held an evidence session on RBS’ Global Restructuring Group and its treatment of SMEs.
Oral evidence was provided by Tony Boorman, Managing Director of Promontory who investigated the bank on behalf of the FCA and upheld the allegations against the bank. Ross McEwan, RBS Chief Executive, and Sir Howard Davies, RBS Chairperson, were also questioned by the committee.
Responding to today’s evidence session, author of the Tomlinson Report, Lawrence Tomlinson, commented: “It seems that after significant pressure from the Treasury Select Committee, RBS has finally admitted to the findings of the FCA section 166 report. Based on RBS’ denials to date, it is not surprising that Ross McEwan forgot RBS’ fourth business principle: “Do the right thing”.
Perhaps the irony is not lost on Ross McEwan and Sir Howard Davies that very much like the despicable advice given on how to treat customers in their “Just Hit Budget” document, RBS has given itself the rope to hang itself with.
After years of denial, avoidance and aggressive response to victims, today’s embarrassing dressing down by the Treasury Select Committee should finally prompt RBS to take responsibility for the damage this bank has done to not just its customers, but the whole business-banking relationship.
If Ross and Sir Howard are sincere in their desire to rebuild trust and “do the right thing” then they will reflect on today’s evidence and agree to lift the gagging orders from settlement cases and ex-employees so we can finally see the full truth.
Then again, maybe the culture in RBS has changed little since GRG’s heyday and RBS remains, too big to fail, too big to regulate and too big to manage.
Promontory’s Managing Director was crystal clear on his view of the systematic and institutional nature of GRG’s mistreatment of SMEs. Having raised concerns about the treatment of businesses by RBS GRG back in 2013, I am pleased that Promontory has done such a thorough job and upheld that Sir Andrew Large and I were right to raise concerns about possible systematic failures in RBS’ turnaround division. All I have ever wanted to achieve was a thorough investigation of these issues and accountability for any misdeeds found. The former has now been confirmed and so the next part is most important: who was responsible, what did they know and was it intentional? Then it will be time to hold those responsible accountable.
Parliament has clearly got behind this issue. Alongside the pursuit by the Treasury Select Committee, the recent debate in the Commons shows that MPs from all political parties are completely in support of more substantive action to hold the bank to account and achieve justice for individuals affected.”
The FCA investigation was instigated by allegations contained in a report by Lawrence Tomlinson who raised concerns about RBS’ treatment of SMEs in GRG in 2013. At the time, Dr Tomlinson was Entrepreneur in Residence at the Department for Business and his report was passed to the regulator by the Secretary of State for further investigation.
The FCA Skilled Person’s section 166 report (undertaken by Promontory) upheld the allegations made in the “Tomlinson Report”. In significant areas, Promontory found there to have been “systematic and institutional” inappropriate treatment of business in RBS GRG. Examples of the majority of bad practice identified in the Tomlinson Report were upheld by Promontory. RBS has, to date, continued to deny this.
