PINSTRIPE

Something we should be wary of is organisations which change their names - generally they have something unhelpful in their past they would rather we forgot.

Guinness becoming Diageo was the first one I recall, Windscale becoming Sellafield, the EEC becoming the EC which became the EU - there are plenty of examples .

One such organisation is RBS’ Global Restructuring Group - GRG for short - which used to have the less grandiose name of Specialised Lending Services. This RBS division dealt with the bank’s troubled loan portfolio - the idea being that more focused and specialist resource will obtain better outcomes for the bank. GRG is accused by some former customers of unfair treatment.

The Tomlinson Report on this subject, published in 2013 , is a worthwhile read .

Are these accusations true? The answer is we don’t fully know because all the facts have not yet come out. RBS deny the worst of the accusations but admit that GRG's behaviour " did not meet our own high standards " and have now set up a compensation scheme . A recent Financial Conduct Authority report concluded that inappropriate treatment of customers by GRG was systematic.

What I know is that I have tangled with GRG on a number of occasions - two in particular come to mind which were truly miserable experiences for the RBS customers concerned. A number of things shocked me, most of all the mutual dislike between the mainstream RBS corporate bank and GRG. The former was, in my experience, staffed by individuals who wanted to serve their customers and thought it would be a disaster for the bank’s relationship with the customer for GRG to become involved. GRG on the other hand were exceptionally rude about their own colleagues and generally behaved as arrogant bullies.

On the first occasion the customer was burdened with higher interest rates and new fees which were not for negotiation. Eventually the company went into receivership, shareholders and ordinary creditors lost everything and employees in the pension scheme suffered greatly. RBS held a shareholding in the new company which rose out of the ashes and ended up getting back more than its original loan. Was that fair and right? It did not feel that way to me.

The root of the problem is that in business what is easily measured is often overvalued. The situation I have described above seems like a success - you have lent £100, you are worried you are only going to get £50 back but you ultimately get £150. What’s not to like? Pats on the back for the GRG team? What this ignores is the effect on people. A whole group of individuals with friends, connections and other businesses went away from that situation with a bitter loathing of RBS. Quietly, slowly, like rust eating away at a once strong structure RBS is weakened because business it wants does not want it but, because that is hard to measure, the bank does not realise the damage done.

It does not have to be like this. In the second situation where I endured GRG up close they tried the same unpleasant tactics. Luckily the customer escaped because it also banked with Bank of Scotland - what a contrast - Bank of Scotland continued to treat the company like a customer with a problem that could best be dealt with by working as a team built on trust.

What has happened to GRG ? Well guess what , it's had its name changed by chopping off the word Global and we are told it's no longer a standalone division - but it's still there , hidden away within the bank. Come on RBS , it's time to clean the stable properly.

Pinstripe is a senior member of Scotland's financial services community