Royal Bank of Scotland says law firm Clifford Chance has cleared it over allegations that it forced small firms to close so it could make a profit.

The bank asked the law firm to look into the claims in November 2013 after a report criticised it for its treatment of small firms.

The law firm concluded that there was no evidence to support the allegations.

RBS chief executive Ross McEwan welcomed the findings, calling the allegations “serious and damaging”.

Clifford Chance was appointed by RBS to undertake the review following allegations made by Lawrence Tomlinson, an entrepreneur, who said in a government-commissioned report there was evidence that the bank deliberately put some “good and viable” businesses into default so it could make more profit.

The Tomlinson allegations centred on the bank’s Global Restructuring Group (GRG) lending division, 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.

‘Right step’

“I welcome the Clifford Chance findings, which show no evidence of the serious and damaging allegation that we had set out to deliberately defraud our business customers,” said Mr McEwan in a statement.

Jon Pain, RBS’s chief conduct and regulatory affairs officer, said: “Clifford Chance was given full access to all the files, paperwork and people they requested to see within the bank.

“Dealing with customers in financial distress is one of the most difficult things in banking. We will continue to do everything we can to improve the experience of those businesses that get into trouble.”

RBS also announced a range of actions to ensure that it can improve its support for small and medium-sized enterprises when they get into financial trouble.

Business Secretary Vince Cable said RBS had taken “the right step” in asking Clifford Chance to review the allegations.

He added: “The report contains some important lessons for the bank, which is taking some decisive actions as a result.

“The Financial Conduct Authority is still conducting its independent review of the allegations which, whatever the outcome, will enable RBS to begin to restore trust in their organisation and provide vital support to business customers.”