Almost all senior RBS Restructuring employees previously worked at troubled GRG

GRG was a support unit for troubled businesses which came under fire in 2013 after allegations that it mistreated troubled businesses to profit from their financial hardship.

The recently published FCA report found "widespread inappropriate treatment of customers by GRG; that this inappropriate treatment was not confined to failures in process; and that in a significant proportion of cases - one in six - that treatment appears likely to have caused material financial distress".

GRG was replaced by RBS Restructuring in 2014. During RBS’ oral evidence session with the Treasury Committee last month, RBS was asked what proportion of the staff at a senior manager grade and above at RBS Restructuring previously worked at GRG.

RBS revealed that 136 of 182 current Restructuring employees and 30 of the 32 employees at senior manager grade or above previously worked in GRG.

In separate correspondence with the Committee Ross McEwan, RBS' chief executive, has listed a breakdown of complaints and outcomes of the GRG complaints process. To date, just £1 million has been paid out in direct loss claims. On current trends, it will pay out under £5 million in direct loss claims in total.

Nicky Morgan MP, Chair of the Treasury Committee, said: “Mr McEwan has assured the Committee that the culture at RBS Restructuring is fundamentally different from that of GRG.

“The discovery that almost all the senior management in the new unit previously worked at GRG raises concerns that there has merely been a rebranding exercise.

“I have asked Mr McEwan to set out how the training programme and performance objectives of these staff have been developed to address the toxic culture described in the Promontory report.

“The value of payouts so far for direct losses from GRG’s actions is surprisingly low. I have asked Mr McEwan to supply the Committee with updated figures on complaints outcomes on a quarterly basis.

“There remains a substantial sum of money – up to £280 million – within RBS’ earmarked budget for its Complaints Process, which could be paid out under consequential losses.

“Mr McEwan has acknowledged that consequential loss is often far greater than direct loss. To provide confidence that fair and reasonable compensation is being provided, decisions on consequential loss must be subject to independent oversight. RBS shouldn’t be marking its own homework.”