To do that, RBS has appointed former Bank of England deputy governor Sir Andrew Large to lead a review into its ‘lending standards and practices’, looking at how it makes decisions on small business lending. It reckons this will help it identify ways it can ‘improve its support’ to small businesses.
‘Demand for lending remains a challenge, but we want to do more than just wait for [it] to materialise,’ said RBS head of corporate banking Chris Sullivan.
‘We want to play our part in securing the recovery.’
Large, who also worked as deputy chairman at Barclays and spent five years as chairman of the Securities and Investments Board (pre-Financial Services Authority) will work with consultant Oliver Wyman. Their recommendations are expected to be published in the autumn.
This isn’t the first time banks have gone all gooey over small business lending: remember Project Merlin, the ill-fated attempt by government to cajole banks into lending? And then there’s Funding for Lending, the government scheme which aims to persuade banks to lend to businesses by providing cheap finance to them. Neither have been much of a success: figures out at the beginning of last month showed lending during the first quarter of the year hit £2.6bn, £6.9bn less than the quarter before.
Then again, as alcoholics like to point out, the first step to recovery is admitting you have a problem, and RBS’ decision to lead its own review into the subject does feel a lot like an admission.
Of course, we know from comments by various insiders involved with the ousting of RBS chief executive Stephen Hester that the government isn’t shy about getting involved in the bank’s big decisions – but MT is choosing to remain optimistic...