Royal Bank of Scotland (RBS) has been hit by allegations that it forced viable companies into default in order to seize their properties at bargain prices, according to the Financial Times.
Royal Bank of Scotland (RBS) has been hit by allegations that it forced viable companies into default in order to seize their properties at bargain prices, according to the Financial Times.
The bank faces claims in two separate reports that it is turning away creditworthy businesses seeking loans and is even forcing financially sound companies into default to make a profit from them.
The paper cites a report by UK government adviser Lawrence Tomlinson who alleges that RBS has been guilty of the 'systematic abuse' of corporate customers since being rescued by the state in 2008.
Tomlinson claims that some businesses are unjustly being transferred to the bank's Global Restructuring Group where they are hit with high fees and have their devalued assets taken over by the bank's own property division.
Another independent report into RBS's business lending activities is also expected to be highly critical of its failure to provide credit to sound companies.
RBS has said in a reaction that it is simply trying to unwind some of its risky commercial loans to make the bank strong again. It said a new plan for the way it treats its customers will be presented in February.
