THE reputation of Royal Bank of Scotland plunged to a new low yesterday after an investigation found staff at the lender mimicked a foreign national, threatened business owners with receivership, and urged colleagues to state claims from a retail customer which had gone into administration.

The damning findings are documented in a 362-page report into the state-backed bank’s treatment of business customers, published by the Treasury Committee under parliamentary privilege yesterday.

READ MORE: RBS finds it difficult to leave the past behind

The Financial Conduct Authority (FCA) had previously resisted publishing the report in its entirety, citing legal reasons. But it had come under increasing pressure to publish the full findings as details of the bank’s treatment of customers were laid bare in the House of Commons last month. Those included a shocking memo entitled “Just Hit Budget!”, which under a section titled “Rope” advised: “Sometimes you just need to let customers hang themselves.”

One City analyst declared that the report “shines a light on the gruesome culture” at the heart of the bank’s Global Restructuring Group (GRG).

Treasury Committee chairman Nicky Morgan, who had ordered the City watchdog to publish the full report by February 16, branded the findings contained in the report as “disgraceful”.

“The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high interest rates and the acquisition of equity and property,” Ms Morgan said.

“The committee has not taken the decision to publish lightly. Normally, reports prepared under section 166 are confidential, but there is overwhelming public interest in bringing transparency to what happened at GRG, given the earlier leak of the report.”

READ MORE: RBS finds it difficult to leave the past behind

While GRG had ostensibly been set up to help companies in financial distress, it faced accusations of mistreating customers and forcing viable businesses into financial difficulty to seize their assets. The bank has already set up a complaints process for customers which were referred to the GRG between 2008 and 2013.

The Skilled Persons Report, commissioned by the FCA, found there had been “widespread inappropriate treatment of SME customers” over the period under review. “Some elements of this inappropriate treatment of customers should also be considered to be systematic,” it said.

The report, carried out by compliance consultant Promontory, commented on aspects of the wider culture it found at GRG. It highlighted what it termed inappropriate email correspondence with a foreign national, leading Promontory to tell the bank: “We note that some email correspondence relating to this case fell short of the professional standards to which the bank would expect to aspire. In particular, the mimicry contained in the email of December 2010 was disrespectful to the customer’s nationality.”

READ MORE: RBS finds it difficult to leave the past behind

One email highlighted a case where a retail customer had gone into administration. An email sent to 24 staff, which was entitled “Nobody beats [Customer]… in Administration anyway!!!”, stated: “Team, I’ve saved a list for the [customer] sale. Other/ [GRG Office]/ [customer] list. Can you go in and add your name and what you want under two categories – key/ large items and miscellaneous (if for example like me and [staff name] you’re kitting out a new spot).

“It’s looking tight from [name’s] view to get any special treatment here, so keep things to staff only and don’t take the p*ss. We may not get special treatment, but we’ll push for it.”

Elsewhere, the “aggressive” behaviour by some GRG staff was highlighted. In one case extract, a customer said their relationship manager was “banging on the table with his hand really loudly, shouting at the top of his voice, issuing threats of instant receivership”.

Royal Bank reiterated last night that the report had not found the bank guilty of the most serious allegations levelled at its GRG unit.

READ MORE: RBS finds it difficult to leave the past behind

A spokesperson said: “We are deeply sorry that customers did not receive the experience they should have done while in GRG. The report makes for very difficult reading and some of the language used by our staff in the past was clearly unacceptable.

“Although the most serious allegation – that we deliberately targeted otherwise viable businesses in order to distress and asset-strip them for the bank’s profit - has been shown to be without foundation, we know that the bank got a lot wrong in how it treated some customers in GRG during the financial crisis.

“That is why we put in place two steps – a complaints process overseen by retired High Court Judge, Sir William Blackburne, and an automatic refund of complex fees – to put things right. Any in-scope customer who feels they were treated inappropriately whilst in GRG should make use of the complaints process which the FCA agree is an appropriate response to the findings.”

The publication of the report will be a further damaging blow to the bank as it bids to return to financial health following its £45 billion bailout at the height of the financial crisis.

The bank, which is 71 per cent owned by UK taxpayers, was heavily criticised for announcing further, swingeing branch closures before Christmas. It was forced into a partial U-turn on the closures, which would have seen it cut more than one-third of its total network in Scotland, in the face of a public outcry. Ten of the rural branches earmarked for closure were given a stay of execution last month.

READ MORE: RBS finds it difficult to leave the past behind

The bank is facing a hefty settlement in the US for its role in the sale of residential mortgage-backed securities in the run-up to the financial crisis. Analysts estimate the settlement is likely to be in the region of £5 billion to £12bn. The bank is expected to announce its first annual profit in around a decade when it presents its full-year results on Friday.