RBS promises to boost its lending to small businesses

SMEs have been promised more financial support as pressure builds on Royal Bank of Scotland to offer more credit.

The taxpayer-owned bank is now writing to 100,000 small and medium-sized businesses across the UK to offer more funding. The move comes after Chancellor George Osborne demanded RBS did more to support the economy last week.

RBS is already the UK’s biggest lender of capital to businesses and has said that it has a £20bn surplus in corporate deposits it wants to lend. The bank plans to offer loans on ‘economic terms’ based on factors such as affordability and repayment history.

Corporate banking chief executive at RBS, Chris Sullivan, said: “We want SMEs to realise the borrowing opportunities open to them.

“RBS and NatWest are pulling out the stops to show businesses how much we can lend them because we want to increase their confidence levels to invest in future growth.”

Many banks have come under fire in recent months for cutting their lending for businesses, despite lenders saying that demand for loans is down as paying off debts is becoming a priority amongst SMEs.

Mr Osbourne outlined his expectations of RBS in a speech last week: “While the bank is healing, let’s be frank: it has not healed as quickly as we hoped. It has not done as much to support the recovery as any of us would have liked. RBS will focus on its core UK businesses, serving its personal, SME and corporate customers.

“It will not aspire to be a global full-service investment bank, and the ongoing reduction of its markets business will continue.”

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