GDP Partnership Statement On FCA Report On RBS / Ulster Bank GRG

Over the last five years our practice has been inundated with customers from Ulster Bank whom claimed the Global Restructuring Group was unfairly treating them. At that time our own professional team experienced at first hand the systems and processes that the bank were administering and how they were dealing with their customers. There was a general consensus at that time, that the bank where treating their customers in an inappropriate manner and that in fact this was systemic within the GRG department.

After three years, today the Financial Conduct Authority has issued its findings in relation to many of their allegations and in summary exonerates the bank from eight accusations and implicates them in a further nine.

GDP Partnership's reading of the summary report by the FCA raises more questions which we feel require answers.  

For example, we draw your attention to two points in particular (1) In part one of the summary the FCA states that it finds RBS did not set out to artificially engineer a position to cause or facilitate the transfer of a customer to GRG. However in point (5) where it implicates the bank it states, the failure to ensure that appropriate and robust valuations were made by staff, and carrying out internal valuations based upon insufficient or inadequate work – especially where significant decisions where based on such valuations.  These two findings are in complete contradiction and extremely unsatisfactory as it was on the foot of so called professional red book valuations that many people found themselves in this department that went on to be disbanded by the bank.

The second example we would highlight in the statement we feel requires further scrutiny and explanation relates to the infamous now disbanded West Register department that operated within the bank on an unbeknown basis to many people including RBS / Ulster Bank Customers.

Point (7) where it attempts to exonerate the bank states, there was no evidence that an intention for West Register to purchase assets had been formed prior to the transfer of the customer to GRG and also point (8) where it states, there were no cases identified where the purchase of a property by West Register alone gave rise to a loss to a customer. If you now go to point (8) where it implicates the bank it clearly states, the failure to handle conflicts of interests inherent in the west register model and operation.

The above is unfortunately again clearly contradictory at best and the FCA needs to come out and clarify this information.

We would conclude that it appears this report falls way short from what we expected. The £400MM compensation scheme has already been shot down by the SME alliance group in the UK, which comprises of hundreds of aggrieved RBS/Ulster Bank customers who say their clients losses exceed £1BN.

We do believe the report has to be welcomed as ultimately it sets out very clearly that RBS / Ulster Bank behaviour in their GRG units and West Register was wholly unacceptable.  

The big question moving forward will be is there anyone within RBS / Ulster Bank who will be made accountable for this behavior that clearly went on for a number of years, and if so - how? And then the more pressing point for borrowers as to who will qualify for this compensation scheme.  

It looks like this story is going to run and run in the short to medium term as RBS/Ulster Bank has committed to a serious PR campaign to downplay the roles of their GRG and West Register Units.

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