RBS sets aside £400m for GRG refunds
RBS has set aside £400m in compensation and created a new complaints procedure for SME customers in its Global Restructuring Group, the arm handling distressed loans and assets in the aftermath of the financial crisis.
The bank acknowledged that “in some areas” it could have done better for SME customers in GRG.
RBS has set aside £400m in compensation and created a new complaints procedure for SME customers in its Global Restructuring Group, the arm handling distressed loans and assets in the aftermath of the financial crisis.
The bank acknowledged that “in some areas” it could have done better for SME customers in GRG.
It said it could have managed the transition to GRG better and should have better explained to customers any changes to the prices or complex fees it was charging.
However, an FCA update, which is following a review into the GRG between 2008 and 2013, said there was no evidence found of RBS artificially engineering a position which caused the transfer of customers to GRG.
It also said there were no cases where the purchase of a property by West Register alone gave rise to a financial loss.
Sir William Blackburne, a retired high court judge, will act as an independent third party to oversee the complaints process, while there will be an automatic refund of complex fees paid by SME customers in GRG during the relevant period.
The bank estimates the costs associated with the new complaints review process and the automatic refund of complex fees to be approximately £400m, to be provided in Q4 2016.
Between 2008 and 2013, RBS said there was an unprecedented increase in SMEs falling into financial distress and the number moving into GRG increased by around 400%. It said it lost more than £2bn from lending to SME customers.
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