RBS pledges £1bn of funds to ‘do more’ for small firms
Royal Bank of Scotland today promised to lend an extra £1bn to smaller firms as it seeks to rebuild a reputation tarnished by the treatment of some business customers by restructuring bankers.
The additional lending, from subsidiary Natwest, is aimed at those firms investing in "productivity-improving measures".
Natwest commercial banking chief executive Alison Rose said: "If the UKs economy is to grow sustainably then increasing the productivity of small businesses has to be a real focus."
RBS and its controversial global restructuring group (GRG) have been criticised for “widespread inappropriate treatment” of its customers. A damning report by the Financial Conduct Authority (FCA) was released earlier this year regulators came under pressure from MPs to make its findings public.
The lender said it was "deeply sorry" for the way "specialist" restructuring bankers mistreated thousands of small firms.
"Our business customers tell us they dont always have the time or headspace to plan effectively for the future, which is contributing to low levels of productivity and slow business growth," Rose said today.
The Natwest exec, who is one of a number tipped as a successor to current RBS CEO Ross McEwan, continued:
As sector specialists we strive to support our customers with detailed sectoral knowledge, but we want to do more.
We believe we can play a big part in that and are delighted to be demonstrating that commitment with this additional investment.
Read more: RBS boss: 'The job's not done yet… I'd like to be around a little longer'
Late payment crisis
The RBS initiative comes as small business leaders warned investment is being shattered by a "£14bn late payment crisis".
The Federation of Small Businesses (FSB) said the number of SMEs planning to decrease investment has hit an 18-month high. More than two-thirds (69 per cent) of small firms will not be increasing investment in the next three months with one in seven (14 per cent) decreasing investment the highest proportion since the third quarter of 2016.
FSB national chairman Mike Cherry said smaller firms continued to be subject to delayed payments from customers, something which constrained cash flow and reduced investment.
“Its hard for small firms to invest when £14bn is being withheld from them due to late payments," he said.
"If all of your working capital is tied up in invoices, then clearly you wont have the cash needed to invest for the future. Following the collapse of Carillion, big corporations need to realise that late payments arent a smart move, theyre a threat to our economy."
Read more: RBS jumps on DoJ settlement reports
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