Reports this morning based on documents leaked to BBC Newsnight and BuzzFeed News suggest that Royal Bank of Scotland deliberately damaged and destroyed businesses in order to boost its own revenues.

In 2014 the Financial Conduct Authority commissioned Promontory Financial Group and Mazars to investigate allegations against the bank by business customers. This investigation has now been concluded and the findings presented to the regulator, who is in the process of reviewing the material before issuing their own conclusions, along with any enforcement action deemed necessary. 

RBS shares fell two percent in early morning trading. Laith Khalaf, Senior Analyst, Hargreaves Lansdown: ‘The evidence now looks pretty damning against Royal Bank of Scotland, yet the irony is the taxpayer is going to end up carrying most of the can for any misconduct costs, as the Exchequer still owns around three quarters of the bank. 

RBS is already potentially facing a multi-billion dollar fine in the US for mis-selling in the run up to the credit crunch. These latest revelations suggest the financial crisis may not have brought an end to bad behaviour at the bank however, which looks to have continued while under government ownership. 

The financial watchdog will give its verdict on the allegations facing RBS in due course, which could lead to yet another fine, and the prospect of a fresh wave of litigation. It’s a sad fact that despite the spectre of the PPI scandal beginning to fade away, conduct costs remain a material threat to the Royal Bank of Scotland. 

The prospect of further ongoing conduct costs, combined with the delayed separation of Williams and Glyn, and a seriously depressed share price, all mean the prospect of the bank leaving government hands remains a distant prospect, if the taxpayer is ever to recoup the money from its £45 billion bailout.’