ROYAL BANK OF SCOTLAND SAID TO START SHUTTING RESTRUCTURING BUSINESSES IN EUROPE

Royal Bank of Scotland Group Plc (RBS) is closing most of its European debt restructuring business outside the U.K. as the nation’s largest publicly owned lender winds down its global restructuring group, according to two people familiar with the matter.

RBS began shutting down units in Amsterdam, Madrid, Milan and Paris in September, said the people, who asked not to be identified because the plan is private.

James Abbott, a spokesman for RBS in London, declined to comment on the closures and the number of employees affected.

RBS is disbanding its restructuring operations as it disposes of unwanted assets and focuses on its U.K. business after receiving the world’s biggest bank bailout during the financial crisis. The global restructuring group came under the scrutiny of U.K. lawmakers last year after a government-commissioned report accused the bank of deliberately pushing viable companies into bankruptcy to boost profits.

RBS identified small businesses as distressed so it could charge them advisory fees and buy their assets at reduced prices, according to a November 2013 report by Lawrence Tomlinson, a government adviser. Law firm Clifford Chance LLP later found no evidence the companies were “artificially” distressed, according to a separate report commissioned by RBS published in April.

Promontory Financial Group LLC, a consulting firm, and the accountant Mazars LLP have yet to publish their reviews commissioned by the U.K.’s Financial Conduct Authority in January.

Asset Sales

Deputy Chief Executive Officer Chris Sullivan and Derek Sach, the global head of the restructuring division, both denied the allegations when they gave evidence to lawmakers in June. Sach will leave the bank at the end of March, a person familiar with the matter said Aug. 8.

RBS’s total assets have been reduced by more than 1 trillion pounds ($1.6 trillion) since the end of 2008, according to its third-quarter results published Oct. 31. The Edinburgh-based lender, 80 percent owned by U.K. taxpayers, is recovering funds as the government seeks to recoup some of the cost of its 45.5 billion-pound bailout.

RBS said it transferred 29 billion pounds of its worst loans to an internal bad bank set up in January to accelerate disposals of toxic assets and free up capital to meet new regulations. The lender had cut 11 billion pounds of assets at the unit by the end of September, according to the results.

Most of the cases that were being handled by the shuttered European restructuring teams have been transferred to the bad bank, according to the two people familiar with the matter. The group’s Frankfurt unit will remain in charge of distressed real-estate assets, one of the people said.

Bloomberg