RBS Goes On The Defensive In Small Biz Scandal

The Royal Bank of Scotland (RBS) has gone on the defensive in the ongoing saga surrounding its alleged mistreatment of small business (SMB) customers.

According to news from The Telegraph on Thursday (Feb. 8), the financial institution (FI) denied allegations by Labour Member of Parliament (MP) Clive Lewis, who accused the bank of misleading MPs while speaking in front of the House of Commons. Lewis claimed RBS bosses were not straightforward to policymakers about the breadth of the SMB scandal when questioned by the Treasury select committee earlier this month.

According to reports, RBS Chairman Sir Howard Davies sent a letter to Lewis denying those accusations against he and RBS Chief Executive Ross McEwan.

This week, the Treasury committee gave the Financial Conduct Authority (FCA) until next Friday to publish its full report into the RBS scandal, which investigated RBS’ Global Restructuring Group (GRG) and claimed it forced small businesses into financial ruin. An internal memo from GRG was recently leaked that reportedly encouraged GRG managers to give small business clients enough rope to “hang themselves,” the Telegraph said.

Lewis told the House that Sir Howard and McEwan were “deliberately misleading” the Treasury committee.

“Far from being isolated incidents of poor governance, as they’ve claimed to the committee, this report explicitly states their behavior was ‘systemic’ and ‘widespread,’” the MP said, adding that the FCA’s summary report amounts to a “sanitized” version of the full report that the FCA has so far refused to make public.

“The bank boasted that one family business was set to ‘lose their shirts,’ so RBS could get a chunky equity deal,” Lewis added, citing an email mentioned in that full report, the publication said.

But Sir Howard denied allegations of deliberately misleading policymakers.

“I can assure you that we did not,” he reportedly wrote to Lewis.

The FCA has similarly found itself under fire for not publishing its full report and allegedly omitting key details of its findings in the summary about RBS managers’ knowledge of the SMB scandal.