Law firm to probe RBS claims

RBS has hired a law firm to investigate claims of "unscrupulous" treatment of small businesses - described as "shocking" by George Osborne. A new report alleges that the lender drove firms to collapse to buy back their assets at rock-bottom prices.

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RBS hires law firm to investigate small firms row claims

The state-backed Royal Bank of Scotland has hired a law firm to investigate claims of "unscrupulous" treatment of small businesses - described as "shocking" by Chancellor George Osborne.

A new report alleges that the lender drove firms to collapse to buy back their assets at rock-bottom prices.

Businessman Lawrence Tomlinson said he had uncovered a dossier of evidence that RBS had deliberately forced companies into default to seize their properties.

Clifford Chance to investigate RBS small firms lending

RBS chief executive Ross McEwan wrote to Sir Andrew Large, Deputy Governor of the Bank of England, to confirm that Clifford Chance will investigate small business lending.

Your report also highlights that when times are tough for our customers, some have said they were angry about the treatment they received.

As you say in your report, many are happy with the skills and expertise we provide at times of financial distress, but to ensure our customers can have full confidence in our commitment to them I have asked the law firm, Clifford Chance, to conduct an inquiry into this matter, reporting back to me in the new year.

It is important that we get this right, especially as our regulators want the bank to remove problem loans more quickly.

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Osborne: RBS reports are 'shocking'

Chancellor George Osborne said the reports about RBS were "shocking". He told ITV's Daybreak:

We are actively trying to seek out these problems, we are not trying to brush them under the carpet.

We are trying to make sure the banks are working for small businesses, the banks are working for hard-working families.

We are, of course, investigating now the findings of this report but, generally, what I've been trying to do is make sure, which is fingered in this report, is working for the families of this country.

RBS restructuring fees 'as high as £256k'

A report into RBS' treatment of small businesses by Vince Cable's adviser Lawrence Tomlinson gives examples of some of the costs businesses say they incurred through the lender's restructuring group.

  • One business demonstrated that their time in GRG cost them £256,000 in fees alone
  • RBS made a firm pay an immediate sum of £40,000 to carry on with current lending
  • Examples of fee levels included a range from £25,000 through to hundreds of thousands of pounds.

Damning RBS report slams banks' 'abhorrent behaviour'

A Government adviser's damning report on RBS' treatment of small firms accuses banks of "heavy-handed profiteering and abhorrent behaviour" towards businesses.

The Tomlinson Report into RBS' alleged treatment of small firms has been made available on the web. Credit: tomlinsonreport.com

The 20-page Tomlinson Report, which Business Secretary Vince Cable has passed to the Financial Conduct Authority, details what is terms a conflict of interest in the lender's relationship with small firms and its property arm West Registery.

Lawrence Tomlinson, who compiled the dossier, accuses RBS of "engineering" the collapse of some small businesses so it could buy their assets back on the cheap.

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RBS 'engineered collapse of firms it was meant to help'

Explosive accusations levelled at Royal Bank of Scotland accuse the taxpayer-backed lender of "engineering" the collapse of some small firms in order to buy back the businesses' properties and assets at rock-bottom prices to boost its property arm.

Royal Bank of Scotland is facing allegations of 'unscrupulous' treatment of small businesses in a report. Credit: PA

An independent report compiled by businessman Lawrence Tomlinson, who is entrepreneur in residence at the Department for Business, Innovation and Skills, claims to have evidence of RBS' "unscrupulous" treatment of small businesses.

He says that there is a conflict of interest between RBS' Global Restructuring Group (GRG) division, which is designed to help small firms "get back on their feet" and its property portfolio West Register.

He says some firms not necessarily in immediate financial distress have been hit with exorbitant rates and fees, which in some cases cause them to collapse, allowing RBS to buy their property and assets on the cheap.

RBS unit 'helped bank face up to property mistakes'

A Royal Bank of Scotland unit that is reported to have imposed harsh conditions on loans, was key to helping the bank face up to its commercial property "mistakes" made in the run up to the financial crisis, said an RBS spokesman.

It is understood the allegations focus on the bank's Global Restructuring Group (GRG) lending division, which handles loans classed as being risky.

RBS did more than its fair share to fuel this and commercial property lending was one of the key drivers of our near collapse as valuations rapidly plummeted.

GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives. Not all businesses that encounter serious financial trouble can be saved.

– RBS spokesman

The group said it was "already committed" to an inquiry on how it treats small firms, following recommendations in a report due to be published tomorrow.

Cable 'confident' RBS chiefs will 'support small firms'

Serious allegations have been made against the Royal Bank of Scotland, Business Secretary Vince Cable said today, after it was claimed that the bank seized assets from firms to benefit its own property empire.

Business Secretary Vince Cable Credit: David Cheskin/PA Wire

Mr Cable, who has passed the evidence to City watchdogs, said: "Some of these allegations are very serious and I am waiting for an urgent response as to what actions have been taken.

"I am however confident that the new management of RBS is aware of this history and is determined to turn RBS into a bank that will support the growth of small and medium sized businesses."

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