FCA release summary of Global Restructuring Report

FCA release summary of Global Restructuring Report

The Financial Conduct Authority (FCA) has published an interim summary of the Global Restructuring Report (GRG) report which looks into a series of serious failings made by Royal Bank of Scotland (RBS). 

After facing pressure from Nicky Morgan, Chair of the Treasury Select Committee (TSC), the FCA has agreed to a compromise and released an interim summary of the main report.

The FCA has identified some failings in how the GRG operated.  In particular:

  • a failure to comply with RBS’s own policy in respect of communicating with customers around transfer, where the standard of much SME customer communication was poor and in some cases misleading,
  • a failure to support SME businesses in a manner consistent with good turnaround practice,
  •  placing an undue focus on pricing increases and debt reduction without due consideration to the longer-term viability of customers,
  • a failure to document or explain the rationale behind decisions relating to pricing following transfer to GRG,
  • a failure to ensure that appropriate and robust valuations were made by staff, and carrying out internal valuations based upon insufficient or inadequate work, especially where significant decisions were based on such valuations,
  •  a failure by RBS to adopt adequate procedures concerning the relationship with customers and to ensure fair treatment of customers,
  • a failure to identify customer complaints and handle those complaints fairly,
  • a failure to handle the conflicts of interest inherent in the West Register model and operation, and
  •  a failure to exercise adequate safeguards to ensure that the terms of certain upside instruments – Equity Participation Agreements (EPA) and Property Participation Fee Agreements (PPFA) were appropriate.

Daniel Fallows, director of Seneca Banking Consultants, gives his full analysis of the summary to Insider.co.uk. Read the article here.

Ross McEwan, CEO of RBS, said in response to the summary,

“We have acknowledged for some time that mistakes were made and have apologised that we did not always provide the level of service and understanding we should have done for these customers in the aftermath of the financial crisis.

“The regulator has again confirmed that the remediation steps we announced in November to address concerns for customers are appropriate. Any customer who feels they were treated inappropriately whilst in GRG should make use of the complaints process.”

FCA to conduct ‘more focused’ investigation

The FCA have since said that they may undertake a ‘more focused investigation’ into how RBS treated small businesses within the Global Restructuring Group, however, it does not uphold the statement that RBS systematically destroyed businesses.

In August 2017, the report was subject to a leak which revealed that 92% of businesses experienced ‘inappropriate actions’, with just one in seven returning intact the main RBS Bank.

Police Scotland are also investigating claims that RBS systematically destroyed businesses through their former turnaround division.

For more information, view our GRG guide here

Seneca Banking Consultants have worked with several businesses affected by the Global Restructuring Group and our GRG findings have been featured in The Times, The Business Desk and The National.

We have recovered £2.75 million relating to GRG losses and just over £100 million in total compensation for clients. If you think that you may have been affected by the Global Restructuring Group, call us on 01204 322805 or use our online enquiry form