TSC chairwoman Nicky Morgan had written to Bailey requesting the full report into struggling small business customers who were referred to RBS’s Global Restructuring Group (GRG).
However in a letter to the committee, Bailey (pictured) said he does not believe the public interest “is best served by [the FCA] publishing the full report”, and reiterated the regulator’s “intention to publish a detailed summary of the Section 166 report”.
Morgan called the situation unsustainable, adding that since the leak of the report to an unknown number of third parties, the public case for full disclosure is “overwhelming”.
“Seven years since it was shut down, there are still conflicting accounts of what really happened to customers referred to GRG. The leak and selective reporting of the skilled persons’ report, which the FCA has had for almost a year, has added to the confusion.”
“Following my letter to Mr Bailey earlier this month, Committee colleagues and I have been overwhelmed by messages from those who consider that their businesses and livelihoods were destroyed by RBS’ GRG. Those affected have a right to know what really happened.
“The committee is due to see the FCA next month, and I have no doubt that these issues will be raised.”
This morning , the RBS-GRG Business Action Group which represents those affected by the GRG, called for Bailey’s resignation saying his position was “untenable”.
RBS’s Global Restructuring Group (GRG), the support unit for troubled businesses, handled over 12,000 businesses between 2007 and 2012. It is alleged to have artificially distressed viable businesses, most of which did not recover.
The report was leaked to the BBC last month, and revealed 92% of “viable” firms seen by GRG experienced “inappropriate action”, such as interest charges being raised or unnecessary fees imposed.
Only one in 10 made it back to the main bank, it reported.
The FCA first announced its review into GRG’s activities in January 2014, after the first allegations against RBS emerged on 25 November 2013.
At the time, Sir Andrew Large, then-chairman of RBS, published the Independent Lending Review, an RBS-commissioned report into its own lending performance. It stated: “RBS needs to address the concerns that have been raised by some customers and external stakeholders about its treatment of SMEs in financial distress and minimise the perceived conflict of interest within GRG. This would be best achieved through a forensic inquiry to substantiate or refute serious accusations that have been made.”
The Financial Conduct Authority (FCA) appointed Promontory Financial Group and Mazars to conduct an independent skilled persons report under section 166 of the Financial Services and Markets Act (FSMA) 2000.
The three key issues centred on the bank artificially distressing viable businesses through lack of fairness or accountability, failing to support them and putting them on a journey to administration, receivership and liquidation.
Originally, the FCA said it expected the report to be published at the end of 2015, which after review by RBS was delayed, shortly followed by a series of leaks in October 2016 to BuzzFeed News and BBC Newsnight.
At the time, Andrew Tyrie MP, then-chair of the TSC, said: “The leaks today illustrate the need for the FCA to get on with publication as soon as possible. I will be writing to the FCA for a publication date.”