RBS hits back at claims of profiting from defrauding small businesses

28th Nov 2013 09:25

The Royal Bank of Scotland (RBS) has dismissed claims that the lender put good and viable small businesses into default so the lender could make more profit. RBS is facing a criminal investigation into allegations that the bank's lending division, Global Restructuring Group, defrauded distressed companies and forced them to close down. The Serious Fraud Office has said that it is monitoring the situation.Ross McEwan, who took over Chief Executive of the state-backed bank last month, hit back at allegations, UK newspaper The Times reported on Thursday."The most serious allegation that has been made is that RBS conducted a 'systematic' effort to profit on the back of our customers when they were in financial distress," he said on Wednesday."We do not believe that this is the case, but it has nonetheless done serious damage to RBS's reputation. No evidence has been provided for that allegation to the bank. The review will investigate the claim fully and I will report back on its findings."Business Secretary Vince Cable has sent the report, about how RBS dealt with the businesses, to the Financial Conduct Authority and the Prudential Regulation Authority.RBS has said that it would "co-operate" with both bodies.The report, which centres on the bank's GRG, was compiled by government adviser Lawrence Tomlinson, who acted independently. The SFO has met with Tomlinson over the matter. Shares rose 1.81% to 336.60p at 10:09 on Thursday.RD