The chairman of Royal Bank of Scotland has admitted his embarrassment over revelations of how it treated small business customers in a bruising session in front of MPs.
Howard Davies, the chairman, described the release of an internal memo showing ways in which bankers were given tips around how to squeeze more money out of firms that were already in trouble as “the stuff of which nightmares” are made. The memo included the line that managers should “let customers hang themselves”.
Mr Howard said: “We can do nothing but abase ourselves as far as that’s concerned. It’s absolutely awful.”
Speaking in front of the Treasury committee in London, Ross McEwan, the chief executive, was also forced to admit that a statement he made in 2014 that the Global Restructuring Group (GRG) turned around the vast majority of businesses that entered it was not true. About 12,000 struggling firms were moved into GRG between 2007 and 2012 but only 10 per cent were returned back to mainstream banking with RBS. More than 30 per cent went into insolvency while others were sold or moved to other banks.
Companies that went into GRG later accused the RBS lender of pushing them into insolvency so that it could pick up their assets cheaply.
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The Financial Conduct Authority and Clifford Chance, the law firm, have both separately investigated what went on inside GRG.
Mr McEwan, 60, who took over as chief executive in 2013, said he still disagreed with claims of widespread mistreatment of customers within GRG and that bank staff were aggressive and insensitive. However, he acknowledged there were instances when customers could have been better dealt with, and said: “Let me be clear, we did not do a good job with these customers. In far too many cases this organisation was not giving them the help they needed.
“There are cases here where we did not get it right and our staff did not get it right.”
Mr Davies, 66, said that RBS accepted the GRG unit had complex fees that were “quite impossible” for customers to understand and an inadequate complaints process.
RBS has set aside £400 million to cover the bill for complaints made by customers over their treatment by GRG. Mr Davies confirmed that close to 1,000 complaints have so far been put through its updated complaints process.
