RBS share price: Bank launches £1bn small business fund

on Oct 9, 2014
Updated: May 24, 2024
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RBS and its subsidiary Natwest have launched a £1 billion small business fund, the British bank announced today.

“Small businesses are the engine room of the UK economy, and it is essential that we do everything we can to support them. The launch of this additional Small Business Fund is another way that we are backing the businesses of tomorrow as they grow,” said Les Matheson, CEO of Personal and Business Banking for RBS.

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According to the lender’s statement, the dedicated fund will offer new borrowing with fixed rate loans from £1,000 to £250,000 with no arrangement fee. The investment will be split between 11 different areas across the UK, and will target both new and existing customers who are looking to grow or diversify their business through new borrowing.

Scotland will be allocated the same level of potential funding as London and the south west of England, RBS noted. Yorkshire and the north east of England will be allocated a pot of £110 million, the north west £105 million, Wales £75 million and other English regions being pencilled in for funds of between £50 million and £55 million.

Matheson said that the distribution of lending reflected RBS’ current loan book. He said: “It is proportionate but if one region ends up having a greater call on funds than another we can always find ways of adding to it.”

A report commissioned by RBS and carried out by Sir Andrew Large found the bank had major failings in the way it lent to small and medium enterprises. The review, published in November last year, recommended the group overhaul its practices.

The research in the report said RBS’s share of the small business lending market had fallen from around 40 percent to 27 percent and was in danger of continuing to decline.

Matheson said the bank’s small business lending market share had grown from 23 percent to 25 percent in the first six months of 2014 and he was hopeful of continuing to grow that. He remarked: “Our lending is significantly up this year on last. We are just taking the opportunity to try and fuel that.”

RBS share price declines

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RBS’ shares have been trading in negative territory so far today. As of 13:56 BST, the stock was changing hands at 360.50p — 1.56 percent down on the day.
Of the 25 analysts projecting 12 month price targets for the FTSE 100 lender for the Financial Times, the median target is 350.00p, with a high estimate of 500.00p and a low of 250.00p.

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