Former Government adviser welcomes RBS U-turn over bank’s ‘profit centre’

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The former Government adviser who published a scathing report on the way RBS managed its relationships with some small businesses has welcomed the bank’s admission that its corporate turnaround division was used as “profit centre”.

Leeds entrepreneur Lawrence Tomlinson made headlines last year when he claimed that RBS had engineered businesses into default to move them into its Global Restructuring Group (GRG). Yesterday he said he was “pleased the truth has come to light”.

RBS’s deputy chief executive Chris Sullivan and GRG head Derek Sach told the Treasury Select Committee that GRG was not used as a “profit centre” when they gave evidence in June, contradicting the findings of former Bank of England deputy governor Andrew Large.

However, in a letter to committee chairman Andrew Tyrie published on Tuesday, Sullivan said RBS now accepted Large’s description. Tyrie said RBS had made a “belated U-turn”. “It now appears that RBS has been wilfully obtuse with the committee,” he said.

Mr Tomlinson said: “I’m pleased the truth has come to light on this issue and the bank has clarified that GRG is a profit-centre for RBS after all.”

An independent review found no evidence the bank had set out to defraud customers but the unit is still being investigated by the financial regulator.

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