LONDON, Oct 23 (Reuters) - Royal Bank of Scotland said on Monday the potential bill for claims against its small business restructuring division will remain at 400 million pounds ($528 million) after misconduct allegations against it were dismissed by Britain’s financial regulator.
Britain’s Financial Conduct Authority on Monday published a detailed summary of a report into RBS’ Global Restructuring Group (GRG). Customers have accused the GRG of pushing ailing firms into bankruptcy to pick up their assets on the cheap.
The FCA last year effectively cleared RBS of the many of the allegations by customers. The bank set up the 400 million pound scheme to reimburse fees to customers who say they were mistreated.
The FCA’s summary said the most serious allegations were not upheld in the report - reiterating findings from its “high level” summary published last year, the watchdog said in a statement.
The watchdog has rejected calls from British members of parliament to publish the full report that was undertaken by a “skilled person”, in this case consultants Promontory.
The detailed summary reiterated that the full report has identified other concerns about the treatment of small firms.
“RBS has accepted that it did not meet the standards it set for itself which impacted on how it treated some of its SME customers,” FCA Chief Executive Andrew Bailey said.
“We are investigating the matters arising from the Skilled Person’s Report and are focusing on whether there is any basis for further action within our powers. We cannot comment any further on this,” Bailey said.
The watchdog could take action against the bank or individuals.
RBS said it welcomed the FCA’s confirmation that the most serious allegations have not been upheld, and that the steps it announced in November to put things right for customers remained appropriate.
RBS said it had completed the automatic refund of complex fees, with more than 115 million pounds of refund offers made. It said it continued to estimate the cumulative cost of these measures to be about 400 million pounds.
“The culture, structure and way RBS operates today have all changed fundamentally since the period under review,” RBS Chief Executive Ross McEwan said.
Parliament’s Treasury Select Committee has hired a barrister to check whether the detailed summary published is faithful to the full report.
The FCA said a final version of the detailed summary would be published once the Committee’s barrister has reported back.
Treasury Committee Chair Nicky Morgan said on Monday it had taken the watchdog too long to publish the detailed summary.
“When its independent adviser reports back later this week, the Committee will consider whether further steps are required,” Morgan said.
Bailey is due to be questioned on the report into RBS by the Treasury Committee on October 31.
$1 = 0.7579 pounds Reporting by Huw Jones. Editing by Jane Merriman