Evidence has emerged that a government agency had a role in the Royal Bank of Scotland Group’s (LON:RBS) controversial turnaround division, the BBC has revealed. The bailed-out lender’s Global Restructuring Group (GRG) was at the centre of allegations that the bailed-out bank forced small company clients out of business to acquire their assets on the cheap.
RBS’ share price has fallen into the red in London this morning, having given up 0.46 percent to 237.00p as of 08:50 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.83 percent higher at 6,890.34 points.
New GRG allegations
The BBC reported yesterday that the Asset Protection Agency (APA) had influenced the strategy of RBS’ GRG division, including decisions which determined business customers’ fortunes. The newswire notes that separate court evidence suggested that the agency had told the lender to withdraw customer support, when the bank did not want to. RBS remains majority-owned by the UK government following the taxpayer-funded bailout during the financial crisis.
The extent of Treasury influence in the scandal is underlined by previously unnoticed APA documents showing that the Treasury agency had influenced GRG’s strategy and its approach to customers’ loans. The BBC, however, notes that RBS has said that it disagrees with the claims, while the Treasury has declined to comment.
Analysts on RBS
Credit Suisse, which rates RBS as a ‘neutral,’ lowered its price target on the shares from 295p to 280p last week, while earlier this month, Deutsche Bank reaffirmed the company as a ‘buy,’ without specifying a price target on the shares. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 304.75p.