Royal Bank of Scotland Group PLC (LON:RBS) chief executive Ross McEwan has told MPs he is “appalled” by an internal memo urging staff to let small business customers "hang themselves".
McEwan and chairman, Sir Howard Davies, on Tuesday faced a Treasury Select Committee hearing over the mistreatment of small businesses under the bank’s global restructuring group (GRG).
GRG has been accused of profiting from the struggles of small businesses with unethical practices such as deliberately charging high fees and pushing some companies into bankruptcy to snap up their assets more cheaply.
A memo was sent to GRG staff in 2009 that referred to its small business clients as “basket cases” and stated that “sometimes you need to let customers hang themselves".
READ: Santander UK boss 'responsible' for RBS mistreatment of small firms
The memo was published by the Treasury Committee earlier this month.
In Tuesday’s hearing, McEwan said: "We were appalled when we saw that letter, absolutely appalled."
Davies said such memos were the “stuff of nightmares are made as far as the chairman or chief executive is concerned”.
He added: "It’s hard to believe how someone could have written in such a way about a customer, or customers. We can do nothing but abase ourselves of that, it’s absolutely awful.”
RBS has lost trust, says McEwan
McEwan said RBS and the wider banking sector had lost trust due to the actions of GRG and admitted there were conflicts of interest, that communication was poor and that was was not an appropriate complaints scheme in place.
Business owners were put under “stress at a time when they were under enough stress”, McEwan confessed.
He retracted remarks he made in October when he said there was “no evidence” that staff had been insensitive, dismissive and unduly aggressive on a widespread basis.
“I know our staff did not get this right. We did not get this right. There may have been cases where our staff were insensitive,” he said.
McEwan says GRG did not save most firms as previously claimed
He also apologised for saying in 2014 that the "vast majority of firms" were turned around by GRG and acknowledged that this was not the case.
Some of the businesses described as turned around had in fact entered insolvency, he confessed.
"We did not do a good job with these customers," McEwan said.
After the hearing, John Mann, Labour MP and member of the Treasury Select Committee, accused some RBS executives of misleading Parliament in the past and said it was clear that "both their integrity and ethics are in doubt".
The Financial Conduct Authority published an interim summary of an independent review into GRG by Promontory in October. It found that 92% of companies were mistreated by GRG in some way.
The watchdog has faced repeated calls to publish the full report.