It comes as the regulator published an interim summary of the independent review into the bank’s Global Restructuring Group division.
GRG, which was a division of RBS, was a business support unit for troubled firms. More than 12,000 companies were transferred into GRG between 2007 and 2012.
In November 2013, Lawrence Tomlinson, then entrepreneur in residence at the Department for Business, Innovation and Skills, claimed the bank artificially distressed otherwise viable businesses and through their actions puts them on a journey towards administration, receivership and liquidation.
The following year in January 2014 the FCA announced a review of the conduct of GRG.
Today’s (23 October) publication is a summary of that review which was completed last year, and which found that while RBS did not set out to artificially engineer the transfer of companies to its business support division, there were “isolated examples” of poor practice.
These include the failure to support SME businesses “in a manner consistent with good turnaround practice” and focusing too much on pricing increases and debt reduction “without due consideration to the longer-term viability of customers”.
Addressing today’s report Andrew Bailey, the chief executive of the FCA, said the case highlighted the “gap in support” for smaller businesses with grievances about business banking conduct.
He said the FCA is currently seeking to widen the scope of the Financial Ombudsman Service to provide more access to this service to SMEs.
But Mr Bailey said he would need more powers if he is to meet the review’s recommendations fully.
He said: “The skilled person that conducted the independent review invited the FCA and other policymakers to consider extending the protections available to SME customers in other ways, in particular for less sophisticated SMEs and vulnerable persons, and to extend the regulations covering unfair contract terms.
“The FCA will make a constructive contribution if invited to do so by lawmakers but ultimately it is for parliament to consider and approve recommendations about widening our statutory remit.”
The FCA published a discussion paper on extending the remit of the Fos in 2015 and a spokesman for the regulator said it would publish its findings “in due course”.
At that time the FCA said that while the number of businesses unable to access the FOs was small, those unable to do so account for a substantial share of the sector’s demand for financial services, and some of them are likely to be less experienced dealing with financial products and services despite their greater size.
The FCA is also considering whether the financial services industry could use voluntary standards such as the Lending Code to further improve the experience of small businesses.
RBS, following the publication of the review’s findings last year, announced a new complaints review process overseen by Sir William Blackburne, a retired High Court judge.
The bank said today that it has made refund offers for complex fees of more than £115m and the cumulative cost of the measures it has taken in response to this issue have been £440m.
Ross McEwan, the chief executive of RBS, said: “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 culture, structure and way RBS operates today have all changed fundamentally since the period under review.”
The FCA has said it is not allowed to publish the full review without the consent of everyone involved but it has agreed to allow a lawyer, appointed by the Treasury Select Committee, to make sure today’s summary is consistent with the full report.
damian.fantato@ft.com
