Royal Bank of Scotland executives have been accused of being “wilfully obtuse” with a Parliamentary committee over whether its controversial Global Restructuring Group was run as an “internal profit centre” for the bank.

Sir Andrew Large used the term in a critical report into the bank’s treatment of small businesses that RBS had commissioned. Another report, by the Government adviser Lawrence Tomlinson, last year alleged that GRG was pushing small businesses into administration to take control of their assets and sell them at a profit, which RBS denies.

RBS’s outgoing deputy chief executive Chris Sullivan, who leaves the bank next year, and GRG’s boss Derek Sach last month told a hearing of the influential Treasury Select Committee that the unit was not run as a profit centre, in an apparent direct contradiction of Sir Andrew.

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The committee’s chairman Andrew Tyrie launched a stinging attack on the bank yesterday after Mr Sullivan was forced to submit a written “clarification” of the evidence.

Sir Andrew had earlier made it clear to the committee in a letter that the bank and GRG staff were perfectly happy with the use of the term.

Mr Tyrie said: “It’s not as if the facts have changed. So it now appears that RBS has been wilfully obtuse with the committee. If this is how RBS deals with a parliamentary committee, how much can customers and regulators rely on it to be straightforward with them?

“I will be writing to the chairman of RBS [Sir Philip Hampton] about this, and the committee will report on it after the summer.”

That report could heap fresh embarrassment on a bank that is trying to repair its reputation in the wake of the mismanagement that led to the bank seeking a state bailout during the financial crisis.

In his letter Mr Sullivan sought to address the apparent contradiction between his evidence and what Sir Andrew had said by saying that “internal profit centre” was “an accounting term” and they had “no issue” with the way it had been used by Sir Andrew.

But he added: “What Mr Sach and I were taking issue with is the way others have used Sir Andrew’s report to suggest that GRG had a profit motive with a prejudice against our customers, rather than a turnaround motive.

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“Indeed as Mr Sach pointed out in his evidence, far from making any profit for the bank, GRG has recorded a substantial loss over recent years. Put simply, GRG deals with many customers who cannot service their debts, leading to losses for the bank.”

Mr Sullivan also said that despite having claimed that he had not seen the report “on further checking with my office I can confirm that I was in receipt of a copy”.

That was not good enough for Mr Tyrie, who highlighted several paragraphs of transcripts covering the term “profit centre”.

In one, Mr Tyrie said “so he just got it wrong” to Mr Sach on the use of profit centre. The latter replied: “I believe so, yes.” Mr Sach later argued that Sir Andrew had “linked two facts together in a way that to me is not logical”.

Mr Sullivan had said: “You asked a question, is this a profit centre? Quite clearly it is not operated as a profit centre and the description was overlooked [when the report was reviewed].”

Mr Tyrie added: “RBS had not objected to the term ‘profit centre’ when given extensive opportunity to comment on drafts of Sir Andrew’s report last year. Yet it decided to contest the term in evidence to the committee, not only in a written statement in February, but also repeatedly in its public hearing in June.”