Ross McEwan, the chief executive of the Royal Bank of Scotland Plc, has provided his opinions on the controversy surrounding the Bank’s Global Restructuring Group (“GRG”) in a recent interview with the Financial Times – the full article can be found
Mr McEwan admits that “he got quite emotional about” the allegations levelled against GRG, as it “hit to the core of our business” but stops short of admitting any wrongdoing on the part of the Bank. Instead Ross purports that the Bank found it impossible to
cope with the near eightfold increase in the number of businesses transferred to GRG and so applied a high volume methodology rather than assessing each case on an individual basis. Mr McEwan accepts that this methodology “was in some cases right and in some
cases won’t have been. But that is sheer volume”.
It appears that despite Mr McEwan’s pledge to put the customers at the centre of everything the Bank do, he is not prepared to admit that there was any wrongdoing by the Bank’s GRG division. Mr McEwan completely ignores the issue of whether the eightfold increase
in businesses placed into GRG was purely as a result of the economic downturn or through the Bank artificially distressing businesses in order to levy additional interest rate and charges and balance their own books.
It will be little comfort to business who suffered at the hands of GRG to learn that the Chief Executive of the Bank feels that their losses were caused due to the wrong methodology being applied to their case. The Bank appears to be sweeping the allegations
that GRG deliberately ruined many viable businesses in order to make profits under the rug.
The fact that RBS was forced to apologise last summer for misleading the Treasury Select Committee regarding GRG being a profit centre and that the division is effectively being disbanded all suggest that GRG has not fared well under the enhanced scrutiny it
has been put under and are trying to divert attention from any potential deliberate actions on the Banks part and instead are suggesting that there may have been mistakes made due to the large volumes of businesses that were placed within GRG.
It remains to be seen what the ongoing FCA investigation into the practices of GRG will reveal. The findings of this report have been delayed and are due to be published in Spring 2015. Hopefully the FCA will shed some light on the Bank’s actions and provide
a means of redress for the numerous businesses and individuals affected.
For more information about any of the above or for practical advice on this or any other aspect of banking and financial disputes, please contact the Berg Banking Litigation Team on 0161 829 2599 or email
Chris Glover at
(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice should
be obtained before taking, or refraining from taking, any action as a result of this article.)