RBS sets aside £400m for SME compensation

The bank has faced claims that it profited from customers who were in financial distress by putting them in its GRG, a unit that was supposed to aid their turnaround.

However, a report by the the regulator today cleared the bank of serious wrongdoing, concluding that it did not "artificially engineer a position to cause or facilitate the transfer of a customer to GRG".

In a summary of its findings, the FCA concluded that "there was not a widespread practice of identifying customers for transfer [to GRG] for inappropriate reasons". However it identified a number of issues, including " the failure to support SME businesses in a manner consistent with good turnaround practice" and other "isolated examples of poor practice".

Despite the FCA finding no major wrongdoing, RBS has announced that it would set up a new complaints procedure for affected customers and an automatic process to refund fees and estimates this will cost around £400m.

Ross McEwan, CEO of RBS said:

“We have acknowledged for some time that mistakes were made. Some of our customers went through what was a traumatic and painful experience as a result of the crisis. I am very sorry that we did not provide the level of service and understanding we should have done.

“Although the FCA review into the historical operation of GRG continues, we believe that now is the right time to deal with the areas where we accept some customers were let down in the past.  I am pleased that with the agreement of the FCA, we are able to announce a new complaints process overseen by Sir William Blackburne, alongside an automatic refund of complex fees paid by SME customers who were in GRG between 2008 - 2013.

“The culture, structure and way RBS operates today is fundamentally different from the period under review. We have made significant changes to deal with the issues of the past, so that the bank can better support SME customers in financial difficulty whilst also protecting the bank’s capital.”