RBS Group dragged into tax-evasion scandal
RBS have a private bank called Coutts and their Swiss arm is reportedly being investigated by German authorities over accusations of their helping rich people evade tax. It was always on the cards that more banks were going to be dragged into this after the whole HSBC thing.
This news follows RBS' announcement that they'd lost £3.5bn.
The combination of these things mean that RBS’ share price is falling as a prosecuting authority in Germany kicked off their investigation into Coutts' unit in Switzerland "for alleged aiding and abetting of tax evasion."
RBS chief Ross McEwan has admitted that private banks have been rather wayward when it comes to conducting themselves in a proper manner: "Any situation like this we take seriously … it is the reputation of our business. This is what has tarnished the banking industry and in my view private banks have taken far too long to catch up with the public’s expectations.”
"Generally private banks have taken far too long to catch up with public expectations and here you’re seeing a situation of that same thing," adding that RBS will "come down incredibly hard on these issues."
This news is further trouble for the bank, who were planning on selling Coutts. RBS were quick to say that any sale had nothing to do with this tax scandal, but sadly for them, this evasion means that RBS could well have to make an agreement on an indemnity as part of the sale.
RBS will be keeping the UK bit of Coutts, who have a very famous client base from years past. Coutts Strand ledgers contain signatures from people such was Bram Stoker and Charles Dickens.