RBS tops up small business support fund, downplays Brexit effect
By Iain Withers
LONDON, April 23 (Reuters) - British state-controlled lender
the Royal Bank of Scotland has doubled its funding pot
to support small businesses to 6 billion pounds ($7.8 billion),
but says the extra cash is no longer primarily for
NatWest, the biggest trading arm of RBS, said it had topped
up its so-called Growth Fund in response to high demand from
firms in industries including green energy and technology.
The lender previously topped up the fund from 1 billion
pounds to 3 billion pounds in October. It said at the time that
it was doing so after identifying nearly 2,000 businesses it
lent to that were likely to suffer payment or supply problems
due to Britain's exit from the European Union.
Since then, Brexit has been repeatedly delayed amid deadlock
in parliament and it is now unclear how Britain will leave the
EU, if at all.
Brexit remained a core driver behind expanding the fund,
NatWest said, but stressed other factors.
"It’s really about demand from growth sectors in the UK
economy," Mike Slevin, head of capital management at NatWest,
"Obviously it remains fully available for companies that
require extra support for Brexit-related purposes as well."
Customers were unlikely to roll back facilities taken out to
prepare for Brexit while uncertainty continued, Slevin said, but
demand for such products has "waned somewhat" in recent weeks.
Banks have been keen to promote their small business lending
credentials ahead of Brexit, but groups representing small firms
have expressed scepticism.
Rival lender Barclays announced a 14 billion pound
fund over three years to help small firms manage uncertainty
including Brexit last month.
However, Barclays' fund included all projected lending to
small companies over a three-year period, rather than just extra
cash over day-to-day funding.
A Barclays spokesperson said the 14 billion pounds would
represent an increase of around a third in lending over the
previous three year period.
"While it's good to see some of the banks looking to
proactively support customers during this period of uncertainty,
the fact remains that lending to smaller firms continues to lag
behind big corporations to the tune of millions each year," Mike
Cherry, chair of the Federation of Small Businesses, said.
($1 = 0.7701 pounds)
(Reporting by Iain Withers; Editing by Susan Fenton)
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