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NWG Natwest Group Plc

264.60
1.80 (0.68%)
Last Updated: 11:32:22
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Natwest Group Plc LSE:NWG London Ordinary Share GB00BM8PJY71 ORD 107.69P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  1.80 0.68% 264.60 264.50 264.60 266.60 263.70 265.00 4,613,665 11:32:22
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Commercial Banks, Nec 14.77B 4.64B 0.5271 5.02 23.26B

RBS to Disband Global Restructuring Group -- Update

08/08/2014 5:43pm

Dow Jones News


Natwest (LSE:NWG)
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From Mar 2019 to Mar 2024

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By Max Colchester 

LONDON-- Royal Bank of Scotland Group PLC is disbanding its controversial Global Restructuring Group, according to people familiar with the matter.

Derek Sach, the head of the division, will leave the bank, as will Aubrey Adams, who heads up the property function within GRG, these people say.

Laura Barlow has been appointed to head up RBS's restructuring activities. Her team will work alongside the group's existing businesses to help clients who are struggling with repayments. Some of the asset that are currently being restructured are being moved to the state-owned bank's "bad bank," these people say.

In November last year Lawrence Tomlinson, an adviser to the U.K. government's department for Business Innovations and Skills, said in a report that RBS's GRG unit regularly forced business customers to default on loans so that the bank could charge higher fees or seize their properties and sell them. The report sparked a political row over the 80% government-owned bank's treatment of small businesses. RBS commissioned law firm Clifford Chance to investigate the allegations. The report said that RBS didn't systematically defraud customers. The Financial Conduct Authority is conducting its own probe into the matter.

Following the financial crisis the number of customers being referred to RBS's GRG unit rose. The GRG unit operated as a stand alone business, employing several hundred people across the world. A report commissioned by the bank on its business lending found that fewer than 10% of businesses referred to the GRG unit end up in bankruptcy. But its author, former Bank of England Deputy Governor Andrew Large, said there is a potential conflict of interest at GRG because it selects the struggling businesses it works with from RBS's larger base of customers, and aims to generate a profit.

RBS has already announced that it will now wait longer before charging small businesses that default a higher interest rate. The bank also closed its West Register unit, which both advises distressed businesses on property matters and bids for their properties.

The latest decision comes as the British economy improves and the number of restructuring cases has fallen. Earlier this month RBS CEO Ross McEwan said that the number of cases being referred to the GRG unit had dropped about 40%. GRG's 670 staff will continue to work under Ms. Barlow.

Mr. Sach, who helped oversee a raft of turnarounds, including that of luggage maker Samsonite, will leave the bank next March. "Derek has had a hugely successful career," said one person close to the bank.

Write to Max Colchester at max.colchester@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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