RBS Launch Business Loan Ads

Fri, 07 Aug 2009

Royal Bank of Scotland (RBS) has launched an advertising campaign aimed at encouraging business customers to take advantage of their loan deals .

The bank launched the advertisements just hours after its executives held talks with Chancellor Alistair Darling over the bank’s lending practices, following the Government's claims that Britain’s banks are refusing to lend.

Earlier this week, Mr Darling warned the UK's six largest banking institutions that they faced a competition investigation unless they increased business lending .

But in response, RBS argued that businesses are being too cautious in taking out loans in the current economic climate.

Peter Ibbetson, chairman of business banking for RBS, said: "Alistair Darling has said that we should be lending more. But I would turn that around the other way and say businesses should be borrowing more from the banks if we want to kick start the economy."

Recent figures from the British Bankers Association showed that lending to businesses by the major banks has fallen by an average of £580m a month over the last six months.

In addition, a recent survey by the Federation of Small Businesses (FSB) found that despite the impact of the recession, 60 per cent of the 13m people employed by small and medium-sized firms in the UK have seen little change in the way banks deal with overdrafts and loans .

However, RBS claims its own poll of small and medium-sized businesses showed that just 18 per cent of companies intend to increase their borrowing this year, with the majority cutting back on spending and focusing on reducing costs.

In February, RBS, which is 70 per cent owned by the government, agreed to increase business lending by £16bn in return for further taxpayer support.

However, new reports suggest the bank has struggled to fulfil its business lending commitment.
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