Royal Bank of Scotland (RBS) said yesterday that an independent review by law firm Clifford Chance found no evidence that it had set out to defraud its business customers.
RBS, which is 81%-owned by the taxpayer, commissioned the independent review after a UK Government adviser accused it of pushing struggling small firms into its turnaround unit, the bank’s global restructuring group (GRG), so it could charge higher fees and take control of their assets.
Ross McEwan, the Edinburgh-based banking giant’s chief executive, said: “I welcome the Clifford Chance findings, which show no evidence of the serious and damaging allegation that we had set out to deliberately defraud our business customers.
“This allegation had a profound effect on the bank and on the work of a team that successfully turns round the vast majority of businesses that it works with.
“We could not let this allegation hang over us. That’s why we acted quickly to appoint Clifford Chance to get to the truth of this claim. We are determined to earn back the trust of our customers.”
He added: “Following the reckless lending that led up to the financial crisis, the bank’s shareholders and customers lost billions of pounds on bad loans.
“The bank, through its restructuring team, helped minimise those losses where it could, successfully turning round thousands of businesses, safeguarding hundreds of thousands of jobs.
“This required the bank to make incredibly difficult decisions, but our first priority then and now is to try to help our customers recover.”
The report was commissioned following allegations by businessman Lawrence Tomlinson – entrepreneur in residence at the Department for Business, Innovation and Skills – that RBS pushed firms towards collapse in order to buy back their assets at rock-bottom prices.
Mr Tomlinson claimed the bank had engineered businesses into default in order to move them into GRG, allowing it to generate revenue through higher fees and the purchase of devalued assets by its property division, West Register.
In response to the Clifford Chance report, RBS said it would wind down and sell any assets in West Register.
The report found some cases where customers felt its fees were not clear and a handful of customers had made allegations about the behaviour of bank staff. RBS said it was investigating those cases.