RBS begins review of lending to SMEs

Bank of England's former deputy governor Sir Andrew Large leads the review.

New Statesman
RBS logo. Credit: Getty Images.

The Royal Bank of Scotland (RBS), which is 81 per cent owned by the British government, has commenced a review of lending to small and medium enterprises (SMEs).

In May, the bank's former CEO Stephen Hester said the bank had a spare cash of €20bn, which it was keen to lend.

The review is being led by Sir Andrew Large, a former deputy governor of the Bank of England, in association with management consultants Oliver Wyman.

Chris Sullivan, head of UK corporate banking at RBS, said: “Demand for lending remains a challenge, but we want to do more than just wait for demand to materialize. We want to play our part in securing the recovery.”

The bank halted financing to SMEs, which play a vital role in Britain’s economy, since the beginning of financial crisis in 2008.

Separately, Ireland-based Ulster Bank, a subsidiary of RBS, is planning to close around 40 branches over the next three years, as part of its plan to return to profits.

This move may affect most of the rural branches of Ulster Bank and leave most of the provincial towns without access to its banking services whilst reducing 1,800 jobs by 2016.

Earlier in January, Ulster Bank said it would to close 22 branches.  In early 2012, Ulster Bank cut 950 jobs.