– RBS aims to be the number one bank for SME customer service
– RBS targets SME lending growth
– Sir Andrew Large recommendations accepted
RBS CEO Ross McEwan has accepted the recommendations set out in an independent review of the bank's SME lending and committed to act on the findings.
RBS appointed Sir Andrew Large, together with the management consultant firm Oliver Wyman, to undertake a thorough and independent review of the lending standards and practices used by RBS and NatWest, for small and medium sized business lending in the UK.
The objective of the review was to enable RBS to enhance its support for SMEs and the economic recovery, while maintaining safe and sound lending practices. A summary of the report's findings and recommendations has been published today.
The report states that RBS has succeeded in delivering a number of critical changes to its SME business since the onset of the financial crisis, re-balancing and stabilising the balance sheet and building the foundations for sustainable growth. But RBS has not supported the SME sector in a way that meets its own targets or the expectations of its customers. It says that while RBS has started to address a number of the issues raised, further progress is needed.
Ross McEwan said: "The picture Sir Andrew Large paints is not an entirely comfortable one, but it's one we have to confront. A successful, vibrant, and well-regarded SME bank is central to the overall value and reputation of this company.
"We must ensure our policies, processes and systems help our people do the best job they can for customers and shareholders in this area. Our aim is to become the number one bank for SME customer service in the UK and to grow our lending along the way.
"The Large review shows that there is significantly more we can do to expand our lending to small and medium-sized businesses. More recently, some of our competitors have managed to increase their lending in this area while we continue to contract. We will address all the issues this report raises."
Ross McEwan has launched a fundamental review of the bank to improve its performance and effectiveness, and will announce a new plan for the way the bank serves its customers around the time of its full year results in February 2014. RBS will fully address the issues raised by the Sir Andrew Large report at this time.
The Sir Andrew Large report highlights a number of improvements which have already been made; however, RBS recognises there is more that needs to be done. RBS will take a series of immediate actions to ensure that we can grow gross lending to SMEs, enhance our service for our SME customers and support the economic recovery.
– The bank will write to thousands more SMEs setting out clearly how much it is willing to lend to their business. It has already offered £4 billion of lending opportunities this way, and following the positive response to these letters RBS are now extending the programme;
– A dedicated website will be developed to show clearly what information RBS use to make a lending decision and set out simple, clear steps in its lending process;
– The bank will begin work to enable bankers to make all but the most complex lending decisions in just five days of receipt of all necessary information – this process can currently take weeks and months in some instances;
– RBS will ensure two thirds of its lending decisions are made locally and by sector specialists;
– RBS will continue to invest in building the capability of its people with at least 90% of Relationship Managers and Credit Managers professionally qualified;
– RBS will start a programme to make all customers whose loan applications are declined aware of the appeals process, and will continue to work with the Independent Appeals Chair to improve the support it provides to customers going though this process; and,
– The bank will commit to pointing businesses to alternative sources of finance where it cannot support a loan application.
RBS aims to become the number one bank for SME customer service in the UK, including as measured in a new survey of SMEs satisfaction with their banks, to be carried out by the Federation of Small Business (FSB) and the British Chambers of Commerce (BCC).
RBS will also look to set specific targets for customer experience for staff; it will work to reduce by half the customer complaints it receives from SMEs; and, it will ensure that none of its services will be conditional on customers buying another product or service with the bank.
RBS will publicly report on progress against these commitments annually.
A summary of the report can be found here.