Royal Bank of Scotland (RBS) was slammed by U.K. lawmakers, who published a report on Tuesday (Feb. 20) that details how RBS mistreated companies that were struggling during and after the financial crisis.
According to a report in Reuters, the Treasury Select Committee said that it published the report in its full unredacted form to showcase how RBS’ restructuring unit at the time, Global Restructuring Group (GRG), had no regard for its business customers.
“The findings in the report are disgraceful,” Nicky Morgan, chair of the cross-party Treasury Select Committee, told Reuters. “The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high-interest rates and the acquisition of equity and property.”
Reuters reported that RBS is denying the allegation that it pushed firms into bankruptcy on purpose so it could buy the assets of the businesses for a cheap price. It did admit wrongdoing on some of the allegations, and reportedly set aside 400 million pounds to pay firms and retool its image.
The lawmakers’ move comes on the heels of a long fight with the Financial Conduct Authority (FCA). As the FCA is still investigating the allegations, it is prohibited by law from publishing the report.
The report noted that GRG worked with around 12,000 struggling companies from 2007 to 2012. Out of 117 companies that were deemed to be potentially viable, 92 percent faced some wrongdoing on the part of RBS, while 16 percent had to endure “material financial distress” because of the RBS unit. The lawmakers’ report found the problems at GRG were due to failure on the part of its parent company to have proper oversight; as a result, the commercial objectives of the unit weren’t balanced with the risks it was posing to customers.