Royal Bank of Scotland Group (LON:RBS) is set to close its scheme to compensate small businesses to new complaints, Reuters has reported. The bailed-out lender unveiled the scheme back in November 2016, setting aside £400 million for firms mistreated by its Global Restructuring Group (GRG) which allegedly forced small company clients out of business to acquire their assets on the cheap.
RBS’ share price has fallen into the red in today’s session, having given up 0.82 percent to 241.50p as of 14:34 BST. The stock is marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.51 percent lower at 7,644.42 points. The group’s shares have lost a little over three percent of their value over the past year, as compared with a near two-percent gain in the Footsie.
Redress scheme to be closed to new claims
Reuters reported today that RBS had said that its redress scheme for firms hurt by its GRG division will close to new complaints. The lender explained that from the 16,000 firms eligible, it had received just 1,230 complaints as well as a further 165 from customers outside of the scheme’s scope. The rate of complaints meanwhile has fallen to six per week from a peak of 35 in December 2016. The newswire quoted the group’s chairman Howard Davis as commenting that with the number of complaints continuing to decline, it was the ‘appropriate’ time to give customers notice of its closure.
RBS said that it would write to all remaining eligible customers to inform them of the scheme’s closure to new complaints on October 22.
Analysts on bailed-out lender
Deutsche Bank, which sees RBS as a ‘buy,’ lowered its price target on the shares from 268.40p to 245.70p this week. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 293.79p.
RBS is scheduled to update investors on its second-quarter performance on August 3.