Leading Tory MP criticises bank’s apparent backtrack on regrets that its restructuring division was described internally as a “profit centre”
Treatment of SME bosses at the hands of the Royal Bank of Scotland (RBS) has
come under the spotlight once again, with influential Tory MP Andrew Tyrie
accusing the organisation of being “wilfully obtuse” with evidence it gave to a
recent probe into its lending practices.
Last month, RBS executives were subject to scrutiny by MPs on the Treasury
Select Committee over concerns that its Global Restructuring Group (GRG)
business was improperly incentivised to maximise returns at the expense of
struggling firms it was tasked with saving. In particular, a November 2013 report
from government advisor Lawrence Tomlinson alleged that GRG had a habit of
putting viable small businesses into default so the bank could seize their
properties and sell them for a profit.
Further research from deputy Bank of England governor Sir
Andrew Large backed Tomlinson’s findings, suggesting that significant
conflicts of interest existed between RBS and its small-business clients
because the bank described its GRG division as an “internal profit centre” – a
financial term for a part of a business that is accounted for on a separate
basis. During Treasury examination, RBS deputy chief exec Chris Sullivan
repeatedly said that use of the term in reference to GRG was “totally
inappropriate”.
Sullivan has now changed his position – agreeing that GRG is a profit centre
and criticising MPs for using the term in the June session to suggest GRG “had
a profit motive with a prejudice against our customers”.
ADMIN: HOW MUCH MORE EVIDENCE DOES RABF NEED TO PRODUCE BEFORE ROBUST REGULATION IS IMPLEMENTED
- See more at:
http://www.managers.org.uk/Insights/News/2014/July/RBS-chiefs-accused-of-belated-U-turn-on-business-lending-evidence.aspx#sthash.jTW1wPpj.i6Tsrzcq.dpuf
Leading
Tory MP criticises bank’s apparent backtrack on regrets that its
restructuring division was described internally as a “profit centre” -
See more at:
http://www.managers.org.uk/Insights/News/2014/July/RBS-chiefs-accused-of-belated-U-turn-on-business-lending-evidence.aspx#sthash.jTW1wPpj.i6Tsrzcq.dpuf
RBS
chiefs accused of "belated U-turn" on business lending evidence
- See more at:
http://www.managers.org.uk/Insights/News/2014/July/RBS-chiefs-accused-of-belated-U-turn-on-business-lending-evidence.aspx#sthash.jTW1wPpj.i6Tsrzcq.dpuf
RBS
chiefs accused of "belated U-turn" on business lending evidence
- See more at:
http://www.managers.org.uk/Insights/News/2014/July/RBS-chiefs-accused-of-belated-U-turn-on-business-lending-evidence.aspx#sthash.jTW1wPpj.i6Tsrzcq.dpuf
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