Royal Bank of Scotland boss Ross McEwan has passed the buck to lower tier executives, saying they are to blame for the lender’s mistreatment of small businesses at the hands of its controversial restructuring unit.
The chief executive made the comments during an hours-long grilling in front of the Treasury Select Committee on Tuesday, where MPs asked who was ultimately to blame for the failings of behaviour at the Global Restructuring Group (GRG).
“Well I think it has to be the senior executive of that operation that takes the accountability,” he said, suggesting blame would not be placed on boardroom leaders of the bank.
“We’ve actually got a number of people whose pay and long-term pay has been suspended while these reviews go on and while the FCA (Financial Conduct Authority) does their review as well,” he added, referring to those connected with the management of the GRG during the period in question.
A small number of those are still employed by RBS.
The FCA is still investigating whether to take further action over the unit’s actions between 2008 and 2011 after publishing a summary report into GRG last year.
RBS had previously claimed the vast majority of businesses were successfully turned around by GRG, but Mr McEwan admitted the definition included those businesses going into liquidation.
Mr McEwan said: “Let me be quite clear with the committee: we did not do a good job with these customers and the report shows that – we did not do a good job.
“At the time when they were in most need of help this organisation in many, many cases and far too many cases was not there giving them the help they needed.”
When pressed by an MP on the Committee, Mr McEwan admitted there “may well have been cases” where staff at GRG had been insensitive or aggressive in their treatment of struggling firms despite previously disputing these findings by consultancy Promontory which was commissioned to write a report on the unit.
Chairman Sir Howard Davies later went on to apologise to “those badly affected” and assured there was an independent complaints process in place to deal with compensation.
Previously undisclosed memos were released this month showing GRG staff being encouraged to apply pressure and extract money from customers.
RBS has insisted the memo was written by a junior manager, did not form part of GRG or bank policy and that the language was “completely unacceptable”.
But Tony Boorman, managing director of Promontory, which wrote the GRG report for the FCA, told MPs: “It did speak something around the culture of the bank at that time and we saw other comments on file at various points that were kind of similar in tone and spirit to the ones that you’re quoting.
“This was more around what I think we described in the report of something of a deal making culture in parts of GRG.”
The Treasury Select Committee also turned attention to the continued employment of Laura Barlow who is former head of GRG’s UK team but was kept on to head up the bank’s new restructuring division.
The Committee said it raised questions over Sir Howard’s claims that “significant cultural changes” had taken place at the lender, though Mr McEwan defended her employment.