Royal Bank in­sists it backs small firms

Lender says new Boost scheme shows it wants to help com­pa­nies achieve po­ten­tial

The Herald - - BUSINESS - MARK WIL­LIAMSON BUSI­NESS COR­RE­SPON­DENT

ROYAL Bank of Scot­land has de­vel­oped a new pro­gramme to help small firms in Scot­land ac­cel­er­ate growth, which the em­bat­tled lender said showed it tak­ing the ini­tia­tive again to sup­port a key sec­tor.

The Boost scheme is in­tended to help firms make use­ful con­nec­tions and to gain ac­cess to ex­perts and in­for­ma­tion on sub­jects rang­ing from in­ter­net se­cu­rity to the po­ten­tial im­pact of Brexit.

It sees Ed­in­burgh-based Royal Bank po­si­tion­ing it­self as a help­mate for busi­nesses rather than sim­ply a provider of fi­nan­cial prod­ucts.

The tax­payer-owned gi­ant has faced fierce crit­i­cism for the way its Global Re­struc­tur­ing Group treated some small busi­nesses fol­low­ing the fi­nan­cial cri­sis.

In Novem­ber the bank re­served £400 mil­lion to re­fund fees paid by cus­tomers of GRG from 2008 to 2013 and launched a com­plaints process headed by Sir Wil­liam Black­burne, a re­tired High Court Judge.

But the head of busi­ness bank­ing in Scot­land for RBS, Su­san Fouquier, said the Boost pro­gramme was the lat­est in a se­ries of moves by the bank to make life eas­ier for small firms.

Not­ing RBS is run­ning a high pro­file ad­ver­tis­ing cam­paign in which it is billed as “Royal Bank For Scot­land”, Ms Fouquier said: “These are not just words. We are proac­tively do­ing as much as we can.”

For ex­am­ple, she noted RBS last year de­cided to is­sue busi­ness cus­tomers with a State­ment of Ap­petite show­ing how much it might be pre­pared to lend them, even for those who had not ap­plied for credit.

“Peo­ple have asked lots about ‘are banks open for lend­ing, are they open for busi­ness’ and we ab­so­lutely are,” said Ms Fouquier.

She added the bank’s new lend­ing for small busi­nesses in Scot­land was “stronger than ever” in the fi­nal quar­ter of last year.

There has been no sign of de­mand for credit fall­ing in spite of re­ports that con­fi­dence lev­els have been fall­ing amid the un­cer­tain out­look for the econ­omy.

Ms Fouquier also cited Royal Bank’s sup­port for schemes such as the En­trepreneurial Spark start-up pro­gramme for early stage busi­nesses.

How­ever, the Boost ini­tia­tive got a guarded wel­come from the Fed­er­a­tion of Small Busi­nesses in Scot­land.

Colin Bor­land, head of ex­ter­nal af­fairs for the FSB in Scot­land, noted re­search by the or­gan­i­sa­tion in­di­cated small firms found credit be­came harder to ob­tain in the fi­nal quar­ter of 2016. This pointed to a tight­en­ing in credit con­di­tions fol­low­ing a pe­riod of eas­ing.

He re­newed the FSB’s crit­i­cism of branch clo­sures by lenders such as Royal Bank. Last month RBS an­nounced plans to close nine out­lets in Ed­in­burgh, half of the to­tal.

The fed­er­a­tion be­lieves branch clo­sures cre­ate dif­fi­cul­ties for small firms es­pe­cially in ru­ral ar­eas.

Mr Bor­land said small firms ap­pre­ci­ate the face to face ser­vice of­fered by peo­ple with lo­cal ex­per­tise in branches and fa­cil­i­ties such as cash han­dling.

Bank branches pro­vide valu­able jobs and draw peo­ple into the ar­eas in which they are based.

“As wel­come as all these ini­tia­tives are, they can’t for­get their re­spon­si­bil­ity to the wider econ­omy,” said Mr Bor­land

Not­ing in­creas­ing num­bers of cus­tomers bank on­line, Ms Fouquier ob­served: “It’s not cost-ef­fec­tive for us to main­tain branches where the foot­fall does not jus­tify it.”

She said RBS em­ploys peo­ple who have de­vel­oped de­tailed knowl­edge of com­mu­ni­ties across Scot­land.

The free Boost pro­gramme will be headed by 11 re­gional Busi­ness Growth En­ablers who will of­fer a one to one men­tor­ing ser­vice with the sup­port of the bank’s re­la­tion­ship man­agers.

It was de­signed fol­low­ing re­search into what cus­tomers most wanted and fine-tuned by the group’s NatWest op­er­a­tion.

Ms Fouquier said stud­ies showed own­ers of small busi­nesses felt good con­nec­tions were vi­tal to suc­cess but many said they strug­gled to make con­tacts, in spite of the emer­gence of on­line net­works.

“We see our­selves as a fa­cil­i­ta­tor of that, we have got the con­nec­tions and the scale,” said Ms Fouquier.

Boost will in­clude reg­u­lar events of­fer­ing learn­ing and net­work­ing op­por­tu­ni­ties.

The bank will hold a launch event at its Gog­a­r­burn con­fer­ence cen­tre in Ed­in­burgh on Thurs­day, with speak­ers from the firm and busi­nesses such as KPMG char­tered ac­coun­tants. ROYAL Bank of Scot­land’s Boost scheme looks like a valu­able ini­tia­tive but may not do as much to re­pair the dam­age done to its rep­u­ta­tion in small busi­ness cir­cles by other ac­tions as di­rec­tors hope.

The gi­ant lender is to be ap­plauded for try­ing to use its sprawl­ing net­work of con­nec­tions and huge knowl­edge base to help firms deal with im­por­tant is­sues, such as how to guard against cy­ber crime.

In a fast-chang­ing world, small busi­nesses are likely to ap­pre­ci­ate the ex­per­tise on of­fer and re­lated op­por­tu­ni­ties to make new con­nec­tions.

But it will take lots of re­ports from happy users of Boost to help dis­pel the un­ease caused by the be­hav­iour of Royal Bank’s Global Re­struc­tur­ing Group fol­low­ing the fi­nan­cial cri­sis.

In Novem­ber, the City watch­dog ac­cused Royal Bank of “sys­tem­atic” fail­ings in the re­struc­tur­ing group, which led to the mis­treat­ment of thou­sands of small busi­ness cus­tomers. The bank has set aside £400 mil­lion to com­pen­sate cus­tomers who com­plain about the unit’s be­hav­iour.

While RBS in­sists it is open for busi­ness, small firms con­tinue to face chal­lenges ob­tain­ing credit on what they re­gard as suit­able terms.

Other banks may face crit­i­cism for their lend­ing records and for branch clo­sures.

How­ever, Royal Bank’s clo­sure pro­gramme has been par­tic­u­larly high pro­file. The re­cent de­ci­sion to close nine branches in Ed­in­burgh likely did lit­tle to en­dear the brand to busi­ness or re­tail cus­tomers.

SU­SAN FOUQUIER: Royal Bank’s head of busi­ness bank­ing in Scot­land said its lend­ing ac­tiv­ity has been strong.

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