Royal Bank of Scotland may be the bank most happy about the end of 2016.
Analysts are looking back at RBS’ struggles this year, which were filled with scandals. RBS failed stress tests imposed by the Bank of England, and Santander — for the second time — decided not to go through with a planned acquisition of some of RBS’ branches.
All of this occurred amid industry-wide pain felt in the U.K. following Brexit, which led to stock prices plummeting for RBS, Barclays and Lloyds Banking Group immediately after the referendum. According to reports, RBS’ and Lloyds’ share prices have yet to fully recover.
But perhaps the biggest scandal the bank endured was that of its Global Restructuring Group (GRG). Allegations mounted this year against the GRG with claims that small business borrowers were forced into the group, even if the businesses were financially sound. The group then allegedly forced many of the companies into insolvency.
“We have acknowledged for some time that mistakes were made,” said the bank’s chief executive, Ross McEwan, in a statement last month. “Some of our customers went through what was a traumatic and painful experience as a result of the crisis. I am very sorry that we did not provide the level of service and understanding we should have done.”
The Financial Conduct Authority (FCA) reached a verdict on the matter and identified wrongdoing in how RBS handled the businesses that landed in its GRG.
Now, the bank is considering whether to withhold bonuses from current and former GRG executives as it awaits the FCA’s final decision. Reports Tuesday (Dec. 27) said RBS is now considering whether to revise how much McEwan and other top executives at the bank can earn under existing long-term pay award guidelines at the bank.
“No decisions have been taken on pay,” a spokesperson for the bank told Financial Times. “We are required to review our pay policy for executive directors every three years and are currency consulting on a number of proposals.”