The City regulator has warned Royal Bank of Scotland Group’s (LON:RBS) senior managers that they will be held personally accountable if there is any failure in the bank’s response to the scandal in its restructuring division, The Times has reported. The lender’s Global Restructuring Group (LON:GRG) is at the centre of allegations in a 2013 report that the bailed-out lender forced small company clients out of business to acquire their assets on the cheap.
RBS’ share price has jumped in London this morning, having gained 1.40 percent to 275.00p as of 08:39 GMT, outperforming the broader UK market, with the benchmark FTSE 100 index having fallen into the red and currently standing 0.57 percent lower at 7,418.46 points. The group’s shares have added just under 40 percent to their value over the past year, and are up by nearly 22 percent in the year-to-date.
FCA warns over GRG scandal
The Times reported this morning that Andrew Bailey, chief executive of the Financial Conduct Authority, had said that any future problems at RBS related to its GRG division, including with the operation of a contentious complaints and redress scheme, would be considered under its senior managers’ regime.
The warning relates to rules introduced in 2016 which make individuals in senior roles personally liable for misconduct within their teams and can lead to sanctions such as fines or bans.
Last month, RBS’ chief executive Ross McEwan hit out at former business customers, accusing them of ‘badmouthing’ the bailed-out lender and making ‘false accusations’ about GRG.
Updated ‘final summary’
The comments came as the FCA published an updated ‘final summary’ of findings by Promontory, the consultancy which conducted the regulator-ordered investigation, but it is resisting pressure to issue the full report into the restructuring unit. The newspaper quoted Bailey as noting that the decision not to publish the full document was “to a large extent” down to “the legal consequences of referring to what management knew or ought to have known”.
The FCA meanwhile is considering a broader investigation into RBS over its restructuring unit.