RBS expecting further fines and compensation for badly treated business customers but pressing on with share sale
RBS has announced an improved capital position but has indicated that it will not pay dividends until the first three months of 2017 at the earliest. The bank is still expecting a “noisy” 2015 having already paid £1.3bn of charges in respect of fines and compensation
payments in the first half of the year for ongoing legal disputes.
The Times has reported that this is likely to include compensation for business customers who were put into the bank’s Global Restructuring Group (“GRG”). berg has long been campaigning for a proper Review scheme and compensation from the bank for SME customers
who have been unfairly treated by the specialist “GRG” division. The bank has now confirmed that its treatment of UK SME’s is “one of the issues it needs to resolve”.
Ross McEwan has also explained that the bank will continue to face further fines for “conduct issues of the past” and that the increased regulatory vigilance means that it may never see the back of its misconduct problems. In May of this year, the Bank was
fined £6billion for its part in the forex rigging scandal. Notably, the bank is now facing a multi-billion pound bill overseas to settle a series of US court cases over its sale of mortgage backed securities. Although it has not yet entered into settlement
discussions, it is expected to do so within the next 6 to 12 months.
It is a positive step forward that the bank is finally acknowledging that it needs to resolve the issue of its poor treatment of SME customers and those businesses devastated by GRG. It remains to be seen how RBS will deal with any review and when this will
be formally actioned.
In the meantime it is vitally important that all businesses who have suffered at the hands of GRG or the specialist units of any of the other banks have an immediate case review to assess the merits of the claim and ensure that any claim does not become time
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