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RBS Appoints Clifford Chance Law Firm to Probe its Lending Practices

RBS Appoints Clifford Chance Law Firm to Probe its Lending Practices (Bloomberg)

Royal Bank of Scotland Group Plc (RBS) chose a law firm, Clifford Chance LLP, to investigate whether the banking company tried to boost its profits by pushing companies that owed it money into financial difficulties. RBS took the action today after a report by Lawrence Tomlinson, chairman and founder of LNT Group Ltd., said that once companies were in default, the bank could charge them advisory fees and buy their assets at reduced prices. As a resutlt RBS has been referred to Britain’s Financial Conduct Authority. U.K. banks, including 81 percent taxpayer-owned RBS, have been criticized by the government for denying loans to businesses since the 2008 financial crisis as they boost capital reserves and enhance their balance sheets. The Bank of England earlier this year extended its plan to provide cheap loans to companies and consumers and make credit available for small firms to help support the economy. “There are many devastating stories of how RBS has wrecked good businesses and the ruinous impact this has on the lives of the business owners,” Tomlinson said in an e-mailed statement. RBS shares rose 0.4 percent to 331.50 pence in London today but only has gained 2.2 percent this year, making it the second-worst performer among Britain’s five largest banks.

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Royal Bank of Scotland Group Plc (RBS) chose a law firm, Clifford Chance LLP, to investigate whether the banking company tried to boost its profits by pushing companies that owed it money into financial difficulties.

archive

RBS Appoints Clifford Chance Law Firm to Probe its Lending Practices

Royal Bank of Scotland Group Plc (RBS) chose a law firm, Clifford Chance LLP, to investigate whether the banking company tried to boost its profits by pushing companies that owed it money into financial difficulties.

RBS Appoints Clifford Chance Law Firm to Probe its Lending Practices (Bloomberg)

Royal Bank of Scotland Group Plc (RBS) chose a law firm, Clifford Chance LLP, to investigate whether the banking company tried to boost its profits by pushing companies that owed it money into financial difficulties. RBS took the action today after a report by Lawrence Tomlinson, chairman and founder of LNT Group Ltd., said that once companies were in default, the bank could charge them advisory fees and buy their assets at reduced prices. As a resutlt RBS has been referred to Britain’s Financial Conduct Authority. U.K. banks, including 81 percent taxpayer-owned RBS, have been criticized by the government for denying loans to businesses since the 2008 financial crisis as they boost capital reserves and enhance their balance sheets. The Bank of England earlier this year extended its plan to provide cheap loans to companies and consumers and make credit available for small firms to help support the economy. ??There are many devastating stories of how RBS has wrecked good businesses and the ruinous impact this has on the lives of the business owners,? Tomlinson said in an e-mailed statement. RBS shares rose 0.4 percent to 331.50 pence in London today but only has gained 2.2 percent this year, making it the second-worst performer among Britain??s five largest banks.

Written By

Paul Dykewicz is the editorial director of the Financial Publications Group at Eagle Publishing Inc., www.eaglepub.com, of Washington, D.C. Eagle publishes five free, e-letters, 10 weekly trading services and five monthly investment newsletters, Forecasts & Strategies, Successful Investing, Cash Machine, Growth & Dividend Report and The Alpha Investor Letter. He also is the editor of Eagle Daily Investor and the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain."

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