Bank inquiry: MLA calls for review into sharp practice

A Westminster committee is holding an inquiry into the banking system in Northern Ireland

An inquiry into Northern Ireland's banking system has heard calls for an independent review of alleged sharp practice by the banks.

Last month a report from businessman Lawrence Tomlinson said he had found evidence that RBS had forced some "good and viable" firms into insolvency so it could make more profit.

The Tomlinson report did not examine the behaviour of banks in NI.

Sinn Féin's Daithí McKay said he would like to see such a review.

Mr McKay, chair of Stormont's Finance Committee, said he would like to see a "Tomlinson exercise" to investigate the extent of alleged misconduct.

The Northern Ireland Affairs Committee is examining the structure of the banking industry though its terms of reference do not take it into the territory covered by Mr Tomlinson.

Mr McKay said that an independent review focused on Northern Ireland "would be useful" as any evidence of banks damaging viable businesses is currently "all anecdotal".

The Tomlinson report, set up by Business Secretary Vince Cable, centred on RBS's Global Restructuring Group (GRG), which specialises in handling loans seen as being more risky.

The Tomlinson report said that putting a business into the GRG generated revenue for the bank through fees, increased profit margins and the purchase of devalued assets by their property division, West Register.

The GRG also operates through Ulster Bank, which is RBS's business in Ireland.

Mr McKay said he did not want to "bash the Ulster Bank", but that it "unfortunately" accounted for three of the four case studies he had presented to the committee.

Those cases concerned businesses being pressured to sell property to pay down loans.

RBS has asked the law firm Clifford Chance to investigate the claims in the Tomlinson report.

It is understood Ulster Bank will be seeking more information from Mr McKay about the cases he mentioned.

The bank is also due to give evidence to the inquiry in January.