Royal Bank of Scotland Group Plc was fined £14.47 million ($24 million) by the markets regulator in the U.K. after being charged of giving its customers poor advice on mortgages.
The British markets regulator made an official statement today, saying that Royal Bank of Scotland Group Plc was accused in what it called “serious failings in their advised mortgage sales business”. According to the Financial Conduct Authority, the bank and its NatWest division did not consider a customers budget when recommending a mortgage, which is most appropriate for them. In addition, the bank was found guilty for not advising customers, who were trying to consolidate their debt properly.
The market regulator shared that sales reviews from 2012 had found out that Royal Bank of Scotlands advice to its customers were not found suitable in over 50% of the cases.
The fine accounts to £14.47 million ($24 million), which is the latest difficulty met by the banks Chief Executive Officer Ross McEwan, who has been trying to clear the 80%-state-owned banks name. Royal Bank of Scotland, which posted a 2013 loss of £8.2 billion, has been continuously investigated by regulators due to past misconduct. It was fined $612 million last year for fixing interest rates.
Chief Executive Officer McEwan commented on the fine in a statement, which was cited by Reuters: “This is unacceptable and should never have happened.” He also added: “We completely overhauled our processes, and took all our mortgage advisers off the front line for an extensive period of time to get the training required.”
However, despite the efforts of the banks Chief Executive Officer, Royal Bank of Scotland Group Plc is still pressed by several other regulatory fines, which could significantly affect the banks second-half results.
Royal Bank of Scotland Group Plc added 0.22% by 08:41 GMT in London to trade at 366.50 pence per share, marking a one year change of +11.03%. The lender is valued at £41.75 billion. According to the Financial Times, the 24 analysts offering 12-month price targets for Royal Bank of Scotland Group Plc have a median target of GBX 340.00, with a high estimate of GBX 460.00 and a low estimate of GBX 210.00. The median estimate represents a -7.03% decrease from the previous close of GBX 365.70.
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