RBS boss says bank did not profit from troubled firms

Tim Wallace
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THE CHIEF executive of RBS jumped to his bank’s defence yesterday, saying he did not believe that it had made a “systematic” effort to profit from its troubled business customers.

Responding to two reports that have criticised lending practices at the under-fire bank, Ross McEwan said the accusations had damaged RBS’ reputation.

“The most serious allegation that has been made is that RBS conducted a ‘systematic’ effort to profit on the back of our customers when they were in financial distress,” said McEwan. “We do not believe that this is the case, but it has nonetheless done serious damage to RBS’ reputation. No evidence has been provided for that allegation to the bank.”

Former Bank of England deputy governor Sir Andrew Large and Department for Business adviser Lawrence Tomlinson both released reports this week noting claims of malpractice at the Global Restructuring Group (GRG) of the taxpayer-backed bank. The bank has appointed law firm Clifford Chance to review GRG’s operations, with restructuring partners Kelwin Nicholls and Carlos Conceicao believed to be heading the magic circle firm’s probe.

McEwan did not address reports that the bank is being investigated by the UK’s fraud squad over its lending practices, but the Serious Fraud Office (SFO) said it was monitoring the situation.

Meanwhile a businessman who is accusing RBS of driving his firm to the wall yesterday told City A.M. that his complaints to the Financial Services Authority were ignored for three years.

Neil Mitchell says the regulator – which was disbanded earlier this year – stonewalled him and his evidence, before his case was taken on by the SFO and the FSA’s replacement, the Financial Conduct Authority, this year.

Mitchell was the boss of Aim-listed software firm Torex Retail, and blew the whistle on colleagues who were later convicted of fraud.

He says RBS’ Global Restructuring Group wrongly took the firm’s assets.

His case is being investigated by the SFO. The FCA and RBS declined to comment on the ongoing case.