RBS share price: City watchdog delays report into lender’s treatment of SMEs

The long-awaited Financial Conduct Authority’s (FCA) report into Royal Bank of Scotland Group Plc’s (LON:RBS) treatment of distressed business customers has been delayed again, The Times has reported. The City watchdog has been looking into whether RBS’ Global Restructuring Group (GRG) pushed companies into default.

RBS’ share price has lost ground in early morning trade, having shed 0.83 percent to 358.30p as of 08:07 BST. The decline is largely in line with a drop in the broader market with the FTSE 100 index having declined 0.70 percent to 6,721.48 points.

The FCA launched the investigation after Lawrence Tomlinson, an adviser to the Business Secretary, published a review in November 2013, claiming that RBS had forced small company clients out of business to acquire their assets on the cheap. The review focused on RBS’ GRG turnaround unit.

While the FCA had initially said that it would publish the results of its probe into the allegations in the third quarter of last year, the deadline was subsequently pushed to the first quarter of the current year and then to the summer. The Times reported yesterday that the City watchdog had said that the report was unlikely to appear until “the end of 2015”.

The FCA attributed the delays to the “complex nature” of the review and the “seriousness of the allegations”. The agency is reportedly interested in how GRG’s activities might have affected the bank’s capital position as it looked to clean up its balance sheet in the wake of the financial crisis.

A spokeswoman for the SME Alliance, which has several members claiming that they were mistreated by GRG, told The Times that the group was “disappointed” by the delays. She, however, added that the investigation needed to be thorough for the benefit of “SMEs, the economy and the reputation of the City”.

As of 09:06 BST, Wednesday, 22 July, Royal Bank of Scotland Group share price is 357.25p.