ROYAL Bank of Scotland (RBS) is launching a digital site aimed at offering small and medium-sized enterprises (SMEs) months after its controversial Global Restructuring Group (GRG) was accused of driving small firms to the wall to cash in on their assets.
Dubbed “Esme” and launched under the bank’s NatWest brand, the site will offer business loans within hours – even outside of opening times.
It will provide up to £150,000 for small firms – including those who are not RBS customers – for a maximum period of five years.
Esme, which has been developed by RBS, will process all stages of the loan application, from credit scoring to anti-money laundering measures.
It comes as part of the taxpayer-owned bank’s latest attempts to digitise its operations and as it prepares to announce further savings of around £800 million next week, as well as its ninth consecutive annual loss.
Alison Rose, CEO of RBS’s corporate, commercial and private banking business, said the digital launch was a response to the rise of similar “peer-to-peer” and other direct lending sites across the country.
She said: “The last thing small and medium-sized enterprises want is to spend hours filling in paper work, so this allows them to quickly complete a digital process. SME lending is a really big part of our engine of growth.”
However, she stressed that RBS would continue to attach a measure of importance to managers whose role is supporting SMEs.
“We know a relationship banker is so important if a company does get into distress. The relationship banker stays with them the whole way through,” she added.
Similar online services to offer faster loans have been launched by rival banks. Santander UK and online lender Kabbage, for example, joined forces last year to provide a quick funding service to small businesses.
RBS set aside nearly £400 million at the end of last year to compensate some of the business owners affected by the GRG claims and, although it admitted it “could have done better” for the 12,000 firms services by the now-defunct group, RBS rejected claims that it had tried to profit from their troubles.
The move to set aside funds by the bank came in November and followed the preliminary findings of a Financial Conduct Authority (FCA) review.
In 2014, Treasury Select Committee (TSC) hearings probed the bank’s GRG and West Register divisions following allegations of fraud, misconduct and profiteering by RBS at the expense of UK business owners. Those allegations arose within the Tomlinson Report a year earlier.
RBS denied any wrongdoing at the time but has admitted subsequently that GRG was a “profit-centre”.
Meanwhile, details of the bank’s latest savings will be given next week when RBS unveils its latest full-year results.
Estimated savings of £800m are likely to include the closure of more branches and cuts in staff.
RBS has not given figures, but there has been speculation that the number of staff affected could be as high as 15,000.
In recent years, RBS has reached agreements with several peer-to-peer lenders and has referred some smaller businesses that it cannot finance – in a bid to “expand choice” for customers with applications that do not meet RBS criteria.
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