RBS accused of being ‘wilfully obtuse’

Conservative MP, Andrew Tyrie, has criticised state-backed bank RBS for giving 'wilfully obtuse' evidence to the Treasury Select Committee earlier this year. The Treasury Select Committee is investigating whether RBS' corporate turnaround division, the Global Restructuring Group ('GRG'), put viable businesses into default in order to boost profits.

In June 2014, Chris Sullivan, deputy chief executive of RBS, and Derek Sach, head of the bank's GRG, denied claims made in a report (the 'RBS Independent Lending Review', 25 November 2013) by former deputy Bank of England governor, Sir Andrew Large, that GRG is a 'profit centre'. Sullivan repeatedly told the Treasury Select Committee in June that the description of GRG as a 'profit centre' was 'totally inappropriate'.

Now, however, in a letter to Tyrie dated 14 July 2014, Sullivan concedes that GRG is a profit centre, but says that in the June 2014 session, he was actually taking issue with the way some had used the term to suggest that GRG 'had a profit motive with a prejudice against our customers'. Sullivan also wrote, 'I need to correct the statement I made to the committee that I did not see a draft of the report, as on further checking with my office I can confirm I was in receipt of a copy during this period and made some comments of a typographical nature'. 

In response to the letter form Sullivan, Tyrie has said that he is going to write to RBS chairman, Sir Philip Hampton, to complain about the evidence given by Sullivan and Sach in June. The Treasury Select Committee will also write a report on its findings this summer. In a statement, Tyrie said that Sullivan's letter represented 'a belated U-turn. It's not as if the facts have changed'. Tyrie continued, 'If this is how RBS deals with a parliamentary Committee, how much can customers and regulators rely on it to be straightforward with them?'. 

RBS' Global Restructuring Group unit manages global corporate clients who find themselves in financial distress and have missed or are in danger of missing debt repayments. It is meant to work with companies to help them return to financial health.