RBS share price: Restructuring unit responsible for ‘inappropriate action’
More than 90 percent of businesses put into Royal Bank of Scotland Group’s (LON:RBS) controversial restructuring division are understood to have suffered ‘inappropriate action’ against them by the bank, the BBC has reported. The lender’s Global Restructuring Group (GRG) was at the centre of allegations made by Lawrence Tomlinson, an adviser to the Business Secretary, in a report in November 2013, that RBS had forced small company clients out of business to acquire their assets on the cheap.
RBS’ share price closed little changed on Friday, shedding 0.04 percent to end the session at 255.80p. The decline was largely in line with the broader UK market, with the benchmark FTSE 100 index falling 0.08 percent to close at 7,401.46 points.
The BBC reported on Friday night that a leaked report by the Financial Conduct Authority (FCA) had found that some ‘inappropriate action’ – such as interest charges being raised or unnecessary fees added – was experienced by as much as 92 percent of viable firms seen by RBS’ GRG division. GRG operated from 2005 to 2013 and at its peak handled 16,000 companies.
The report, seen by the BBC, commissioned for the FCA, found that struggling companies that were placed in the restructuring division had a slim chance of emerging from it, with only 10-percent returning intact to the main RBS bank. The 361-page leaked report further showed that the bank provided only ‘narrow compliance’ to investigators. RBS meanwhile says that it has provided investigators with “circa 323 gigabytes of data, comprising more than 15 million physical pages and 270,000 emails”.
The news marks another blow for the bailed-out lender which continues to struggle with the consequences from its turbulent past. Last week, reports suggested that the company had settled a lawsuit filed by the owner of a bankrupt student-housing company related to a mis-sold interest-rate swap.
As of 08:10 BST, Tuesday, 29 August, Royal Bank of Scotland Group share price is 252.40p.