£775m RBS fund finally made available to almost 500 CEOs
NEARLY 500 banks, lenders and fintech firms will finally receive details on how to access a £775 million fund from Royal Bank of Scotland after months of delays to the scheme.
The Banking Competition Remedies (BCR) body – which is tasked with distributing the cash – said yesterday that it sent invitations to “eligible bodies” for a market event in central London in late September.
The Press Association understands invitations were sent directly to chief executives late on Monday, and included all members of sector trade bodies UK Finance and Innovate Finance, which have around 250 members each.
The event will run through the timeline and application process for the £425 million Capability and Innovation Fund, meant to help bidders develop their current account, lending and payments offerings for business customers.
It will also give details around the separate £350 million Incentivised Switching Scheme, which will encourage SME customers to ditch their RBS account for rival banks.
Not all invitees are expected to attend, and fewer will be eligible for some of the largest pools of cash in the Capability and Innovation Fund.
CYBG – which is in the midst of a £1.7 billion takeover of Virgin Money – is among those that plan to attend the event on September 27, along with the likes of TSB and digital challenger Starling.
They represent just a few of the firms that have been readying themselves for the bid launch for months.
Metro Bank said in April that it had spent £590,000 last year preparing its application, having publicly said it hopes to clinch £120 million in funding to take a larger slice of the business banking market.
Those costs pale in comparison to the £5 million amount spent by CYBG in the six months to March 31 alone, according to its interim results released in May.
The biggest award of £120 million is aimed at banks that already have “substantive” current account offerings, with an aim of developing more “advanced” accounts and products.
That compares to smaller pots of cash that will give £10 million each to four recipients to develop SME lending and payments businesses, particularly through new technology.
Attendees will have to register within the next two and a half weeks, though the event is also set to be live-streamed.
A separate event will be held for those interested in the smallest pool of funding, which will distribute five awards worth £5 million each to help fund financial technology “that is relevant to SMEs”.
The multi-million-pound fund comes from RBS as part of conditions attached to its £45 billion government bailout during the financial crisis.
It replaced plans for RBS to sell off a portion of its SME banking business and is meant to promote competition for banking services to small and medium-sized enterprises.
But the process of doling out the funds – which is the responsibility of the BCR – has been beset by delays.
An update from the BCR last month blamed the delayed appointment of executives for putting the scheme nearly six months behind schedule, with the government originally having said that the application process would launch in the first half of 2018.
With applications set to open around the start of November, financial awards will now be announced in February 2019.