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RBS seeks to attract small firms

RBS seeks to attract small firms - commercial mortgages
Date: 10/14/2009

Royal Bank of Scotland (RBS) is battling to attract more small business customers as it comes under pressure to hit Treasury lending targets.This may prove of interest to those business clients looking to move their commercial mortgage

It said some of its most experienced business bankers were staffing a new hotline to offer would-be borrowers advice and potential access to loans.

RBS and Lloyds have committed to lend firms and homeowners £39bn this year.

Reports have said the government felt the banks were demanding "unrealistic" interest rates on their business loans.

Both are on track to meet mortgage lending targets, but they say targets for small firms are tougher because companies are looking to clear debts in the recession.

However the Treasury is understood to believe that the pricing of loans rather than a lack of demand is holding the banks back.

RBS and Lloyds - both part-nationalised - have been told they must meet their obligations, which were a condition of the banks' taxpayer bail-out.

'Transparent'

In the first half of 2009, RBS lent £28.6bn to business but net lending was down by £7.3bn because customers paid back more.

Lloyds' interim figures also showed corporate lending contracting by £18bn compared with a year earlier.

RBS, owner of Natwest, is now 70%-owned by taxpayers.

The firm, which has about 30% of the UK's small business lending market, has opened its hotline to non-customers for the first time.

RBS has declined to comment on reports of the Treasury probe into its lending criteria, but said it was approving 85% of all credit applications and providing new loans to more than 5,000 firms a week.

The chairman of RBS's small business division, Peter Ibbetson, said that opening the hotline represented "part of our aim to be transparent and innovative".

Firms would get a dedicated case manager handling calls and emails and a defined timescale for when decisions would be made or advice given, he said.

Would-be borrowers still must meet the bank's own criteria, but applicants would get a decision within 30 days, Mr Ibbetson pledged.

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