* Sach says division didn't contribute to bank's profits
* Lawmaker Tyrie says RBS has contradicted Large report
LONDON, June 17 Royal Bank of Scotland's
'turnaround' unit was not used to make a profit out of small
businesses struggling to survive, the head of the division told
lawmakers on Tuesday.
Derek Sach, the head of GRG, told parliament's Treasury
Select Committee, that the division had made a loss of 2.1
billion pounds from its dealings with small- to medium-size
enterprises (SMEs) between 2008 and 2013.
"It doesn't contribute to the bank's profits at all. Our
main objective is to restore the customer's health and strength.
It runs at a loss," he told the committee, which oversees the
work of Britain's finance ministry.
Andrew Large, who was commissioned by RBS last year to
review its lending to small businesses, had said the bank's
Global Restructuring Group (GRG) was being used as an "internal
profit centre" and government advisor Lawrence Tomlinson claimed
small businesses were pushed into the unit so RBS could charge
higher fees and take control of their assets.
Conservative lawmaker Andrew Tyrie, who chairs the Treasury
Select Committee, said he would write to Large for his view on
the inconsistency between Sach's assertion and the findings of
"RBS has flatly contradicted an important conclusion, and
concern, of Andrew Large's report," Tyrie said following the
An independent review by law firm Clifford Chance in April
found no evidence that RBS had set out to defraud small
businesses. But the division's activities are still the subject
of a review by Britain's financial regulator.
($1=0.5956 British pounds)
(Reporting by Matt Scuffham; Editing by Greg Mahlich)