Royal Bank of Scotland (RBS) has apologised for telling MPs that a controversial division of the bank, accused of deliberately closing viable firms, was not seeking to make money from its activities.

The development came to light when the Treasury Select Committee released a series of letters between its chairman Andrew Tyrie and bank chairman Sir Philip Hampton relating to a hearing in June.

The Committee was told then by senior bank directors it was not the case that the Global Restructuring Group (GRG), which managed potentially difficult business loans for RBS, was a profit centre.

A month later, Mr Tyrie wrote to the bank to outline concerns it may have misled MPs in response to a letter from a company which had been hailed by RBS as a happy customer and success story for GRG.

Independent Slitters’ bosses said the evidence given by the bank’s directors “did not reflect Independent Slitters Limited views of GRG”.

Chief executive Daniel Wharrad and managing director Ian Edwards added the company had been “manipulated and played to enhance the public perception of GRG’s work”.

In his response to the committee’s concerns, Sir Philip did accept that GRG was a profit centre, saying: “This lack of clarity on an important point is very disappointing to the committee as it is to me, and I apologise.”

But he insisted the two executives had made an “honest mistake” on the profit issue and they “did not intend to mislead the committee.”

In a statement today to accompany the publication of the letters, Mr Tyrie said: “RBS has done the right thing and apologised.

“It is vital to a sustainable economic recovery in the UK that access to finance for SMEs, from banks and elsewhere, be restored to working order.

“The reality on the ground behind all this is hundreds of thousands of small businesses – crucial to sustaining our recovery.”

The committee is due to report on the issue in the next few weeks.

http://news.sky.com/story/1379222/rbs-sorry-for-incorrect-evidence-to-mps