Law firm Clifford Chance has reported that it found no evidence of Royal Bank of Scotland (RBS) defrauding its business customers in a "systematic and institutional" way.
The firm was appointed by RBS to look into allegations that it had deliberately forced SME customers to the wall in order to buy up their assets at a reduced price.
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CEO Ross McEwan, who welcomed the news, said: "The trust that a bank has with its customers is fundamental. That trust was put at risk at RBS by the allegation of systematic abuse made in the Tomlinson report.
"I welcome the Clifford Chance findings which show no evidence of the serious and damaging allegation that we had set out to deliberately defraud our business customers.
"This allegation had a profound effect on the bank and on the work of a team that successfully turns round the vast majority of businesses that it works with. We could not let this allegation hang over us.
"That’s why we acted quickly to appoint Clifford Chance to get to the truth of this claim. We are determined to earn back the trust of our customers."
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By GlobalDataThe bank fell under suspicion after Lawrence Tomlinson, acting as entrepreneur in residence at the governmental Department of Business, published a report in which he accused RBS of undervaluing and artificially distressing its business customers before stripping them of assets.
Clifford Chance’s report into the work of the Global Restructuring Group and Business Restructuring Group (BRG), the parts of RBS Tomlinson had fingered, said that there was clear evidence of both units making an effort to turn around failing businesses.
"If the bank was guilty of "systematic and institutional" behaviour in artificially distressing otherwise viable businesses, putting its customers "on a journey towards administration, receivership and liquidation", we would not expect to see genuine efforts at restructuring the customers’ businesses and finances, and endeavouring to return them to financial health.
"Even where BRG were ultimately unable to return the customer to the mainstream bank, this generally followed a period where the bank and the customer made serious attempts to achieve a restructuring.
"In our review of files, we observed a number of cases where the customer returned to the mainstream bank and we observed a number of cases where the customers successfully re-banked."
The law firm also rubbished claims that a company RBS had assets in, West Register, had bought business customers’ assets cheaply, saying: "West Register operates as a bidder of last resort or a fall-back option where the open market will not yield a better offer.
"We saw several cases where West Register’s bid was substantially higher than the next highest bid.
"When West Register acquires a property in an open market sale (either directly from the customer or from an insolvency practitioner), it has by definition not purchased a property at a discounted price as the market value of a property is what the market is willing to pay."
RBS acknowledged that its investment in West Register could have created a sense that it had a conflict of interest.
Although the Clifford Chance investigation found no evidence of wrongdoing, RBS is also under investigation by the Financial Conduct Authority (FCA).
The bank said it would co-operate fully with the FCA and also set out some additional measures to repair its relationship with its business customers.
RBS said it would improve transparency in charges and fees associated with restructuring, wind down its investment in West Register and improve its training programme for relationship managers and restructuring teams.
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