RBS should reinvest to support small business growth

rbs profit

Responding to the announcement that Royal Bank of Scotland (RBS) has posted its first profit in a decade, following the announcement of more than 250 RBS and NatWest branch closures in December, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:

“The branch closures announced by RBS at the end of last year are set to limit access to banking for small firms all over the UK. Time that business owners spend travelling to and from bank branches that are miles away is time not spent running and growing their firms.

“Now that RBS is profitable again, it should look closely at how it can support the communities it’s threatening to leave behind with waves of branch closures. The bank has benefitted from public support over the years. It’s important that it now returns support to the public and small businesses.

“Almost all of our members bank online. But they hugely value in-person support when it comes to opening new accounts, discussing finance options and getting to grips with digital banking. Naturally, in many rural areas, there’s no guarantee that broadband speeds will be good enough to bank online reliably. We’re seeing challenger banks with a focus on branch expansion also reporting strong profits, so we know it’s an approach that works from a commercial perspective.

Today’s results show that only £150 million of the £400 million that RBS has set aside for Global Restructuring Group victims has been passed on to those who had their lives destroyed. There have been question marks about whether or not the £400 million is enough. In any case, the redress process is clearly not moving quickly enough. With the full FCA skilled persons’ report now in the public domain, the immediate priority has to be supporting victims. Over the longer-term, we need to create an environment where another GRG can’t happen again.

“The £775 million set aside by RBS to increase small business banking competition rather than sell Williams & Glyn needs to be placed in the hands of those that will really make a difference. It was disappointing to see the dedicated funding to support those losing bank branches removed from the revised terms agreed with the European Commission.

“By reinvesting to support small business owners, RBS can grow its customer base and help increase productivity among the small firms that represent 99% of the business community.”