Ten years on from the financial crisis that brought RBS to its knees, it is still mired in outrage and condemnation. By now it should surely be cruising in calmer waters. Instead it remains in the eye of a ferocious storm over multiple instances of high-handedness and ill-treatment of small business customers amid interminable delays over the publication of a report into these events by the Financial Conduct Authority (FCA). The report, into the bank’s Global Restructuring Group (GRG), has degenerated into farce. MPs are now planning to use parliamentary powers to require publication. Many businesses were forced into receivership by the actions of a banking unit supposedly set up to help firms trade out of trouble. Quite the opposite appears to have been the case.

Now RBS is engulfed by questions raised in the aftermath of these appalling episodes. The reputational stain has spread from the original corruption of culture to the bank’s foot-dragging response. Why has it taken so long for this issue to be dealt with? Has the culture within RBS really changed – even after two changes of top management? What does it take, short of total institutional collapse, for corporate failing to be corrected?

RBS discriminating against disabled by closing branches, SNP claim

After the 2008 crash, RBS was bailed out by the taxpayer but its ability to cause outrage didn't end there (Picture: Getty)

The Commons Treasury Select Committee said this week it plans to compel the regulator to give it a copy of the FCA’s report if it failed to meet a deadline of this Friday to publish. Nicky Morgan, committee chairwoman, has accused the FCA of losing control of events following the leak of the 350-page document to an internet blog. The reason given for the delay is that the FCA needs the consent of former senior RBS managers cited in the report prior to publication. But as the months have passed, this reasoning has come to look threadbare. Lawyers can haggle over the phraseology and semantics in a drawn-out to and fro that can push a final outcome deep into the mists of time.

Former GRG executives have since moved on or moved out. Prominent among these is Nathan Bostock, former head of restructuring and risk at RBS who was also chairman of GRG’s executive committee. He is now UK boss at rival bank Santander. In the words of a spokesman for the GRG Action Group: “All the FCA is achieving with its tone-deaf intransigence is needlessly to prolong the suffering of those seeking justice.” Meanwhile victims of the bank’s errant behaviour have had to soldier on with continuing reputational damage and with claims for compensation gathering dust.

The document covers the way many small firms suffered mistreatment by GRG between 2008 and 2013. By the most galling of ironies, this unit was initially likened to the Bank of England’s ‘lifeboat’ to help companies stricken in the severe 1981-82 recession – set up to avoid failures and receiverships and enable companies to trade out of crisis. Now it seems GRG bosses were found to have put the bank’s interests first in pushing for loan withdrawals and cancellations at the expense of distressed firms. The report heavily criticises the management for creating an “endemic” culture of prioritising commercial goals. And it laid bare a now infamous internal memo which encouraged managers to give struggling customers enough rope to “hang themselves”. Such attitudes were found to be “common” at GRG.

Now the bank’s attempt to downplay the damage has also been exposed. In a Commons Select Committee hearing, RBS chief executive Ross McEwan had insisted that the now notorious GRG had rescued “the vast majority” of the firms taken into its custody. But he has since admitted in a subsequent Committee hearing that this assertion was wrong. “When you look at the stats … the ‘vast majority’ is not right,” he told MPs. In fact, only one tenth of the thousands of firms handled by GRG returned to normal banking. Appearing alongside McEwan at the Parliamentary hearing, RBS chairman Sir Howard Davies said he was “acutely embarrassed” by the memos written by GRG staff. “They are the stuff of which nightmares are made as far as a chairman or a chief executive are concerned,” he said. “It’s quite hard to believe how people could have written in such a way about a customer and about customers. It is absolutely awful.”

If that’s the case for the defence, the case for the prosecution hardly needs to detain us much.

That said, there are points that can fairly be put in mitigation. First, the bulk of the appalling behaviour occurred before McEwan took the helm – and some before his predecessor Stephen Hester took control.

Second, there is more at stake here than the sensitivities of former GRG managers who have now fled the coop. The report will have a significant bearing on compensation claims from small firms that could run into hundreds of millions of pounds.

Third, it would be perverse to the point of blindness to overlook the febrile state of RBS at the time. Once the pride of Scottish business on the world stage, it faced an urgent need to cauterise loss-making activities, substantially reduce the balance sheet and curtail the bank’s risk exposure. That was what Hester and McEwan were sent in to do. These were understandable priorities for a financial institution in receipt of a massive injection of public funds and which urgently needed to rebuild public confidence and trust, without which it could not survive.

There were also many business loans which, in the heady days of 2003-06, the bank should not have made and which could not withstand a ‘normal’ business downturn, never mind the severe crisis of survival that engulfed the bank with the onset of the worst financial crisis in almost 80 years. But the reputational crisis has been made materially worse by the failure to push through radical change in the bank’s culture at the outset and clean the stables more thoroughly. Even ten years after the crisis broke, there is a strong sense that RBS has still to grasp the magnitude of cultural corruption. The result has been to obscure the changes for the better that the bank has achieved in this turbulent period. And broader questions need to be asked about why bad corporate culture can persist for so long. Two committees of MPs are now involved in separate inquiries into protections for small businesses in the wake of the GRG scandal and the collapse of outsourcing giant Carillion.

The immediate priority for now must be the publication of the FCA report – in full.

Bill Jamieson: RBS's decade of shame