U.K. Lawmaker Calls for RBS Report to Be Published After LeakBy
Nicky Morgan writes to FCA asking regulator to publish report
RBS paid $521 million over business lending practices
A report into the business lending practices of Royal Bank of Scotland Group Plc that cost the bank 400 million pounds ($520 million) should be published in full following a BBC report based on the document that alleged inappropriate treatment of many clients, according to a senior U.K. lawmaker.
Nicky Morgan, the new chair of Parliament’s Treasury Committee, wrote to the chief executive officer of the U.K. Financial Conduct Authority on Monday to demand the publication of the report after it was leaked to the BBC last month. The report was commissioned by the regulator nearly four years ago following allegations the bank had deliberately pushed small businesses into default.
The report "is now in the hands of an unknown number of third parties. The FCA now has no control over the timing or content of further public disclosures," Morgan said in a letter to Andrew Bailey. “The balance has tipped firmly in favor of full publication, and I urge you to secure the approval of RBS to do so, without delay.”
A review of RBS’s practices involving clients referred to its so-called Global Restructuring Group began after a government consultant claimed in 2013 the bank had pushed small companies that owed it money into difficulties to help bolster earnings. Following the allegations, the FCA appointed Promontory Financial Group LLC, a consulting firm, and the accountant Mazars in 2014 to review RBS’s treatment of business customers in financial difficulty.
In November, RBS said it would take a 400 million-pound charge to cover refunded fees to small-business customers after a review of clients referred to its GRG unit between 2008 and 2013. TheFCA said at the time it had found some examples of “poor practice” but hadn’t set out to artificially transfer customers to its restructuring unit.
A spokesman for RBS declined to comment on Morgan’s letter.
The BBC story was the second media leak from the investigation after the compensation charge was reported ahead of the FCA’s 7 a.m. press release in November. The regulator told the Treasury Committee that month it had opened an inquiry into the leak. Morgan asked Bailey in her letter to update the panel on its findings.
"This would not be the first instance of leaking from the FCA, but lessons must be learned to ensure it is the last,” Morgan said.
The FCA encouraged the committee and the BBC to share any evidence that the document was leaked by the agency, and said it would reply to Morgan’s letter "in due course."
— With assistance by Stephen Morris