RBS.L Share News (RBS)

(Sharecast News) - Royal Bank of Scotland indicated it was responsible for about half the money lent to small businesses under the government's highly criticised Covid-19 emergency loan scheme.
RBS's chief executive Alison Rose told shareholders her bank had approved about 7,400 loans to small and medium enterprises (SMEs) worth £1.4bn by 23 April. Official figures released on that date showed the total lent by all banks was £2.8bn to 16,600 borrowers.

Rose's figures suggest RBS, which is majority owned by the government, made about 45% of the loans and was responsible for half the money paid out. The figures raise questions about the commitment of other banks to the scheme, which has been criticised for being too slow to get money to struggling SMEs during the crisis.

In her statement to shareholders at RBS's online annual meeting Rose said: "We believe we are doing more than any other bank to operationalise and deliver these schemes for our customers ... "We have managed to extend this very substantial range of extra support without losing sight of the bank's responsibility to manage risk intelligently and ensure our safety and soundness is protected."

The scheme has been criticised after Chancellor Rishi Sunak said he would do whatever it takes to save healthy businesses during the Covid-19 lockdown. Banks originally asked business owners for personal guarantees, which the government then banned, and offered many SMEs commercial loans instead of 12-month interest-free loans backed by the government.

Rose's figures appear to show other banks starting to catch up with RBS. The Telegraph reported on 11 April that RBS had approved 70% or 2,500 of the loans. Sunak announced on Monday the government would increase its backing to 100% from 80% for loans made to the smallest companies.

The government still owns 62% of RBS after bailing it out during the financial crisis in 2008. The bank's chairman told shareholders a planned sale of more government shares was a long way off with the government consumed by the Covid-19 crisis.

"The government reaffirmed its commitment to disposing of its stake in RBS in this year's budget, albeit over a slightly extended period of time," Howard Davies said. "But there is no realistic prospect of a share sale soon. The government has other priorities and more pressing challenges. And so do we."

Ahead of RBS's first-quarter results, Rose said she expected Covid-19 to affect the bank's financial performance for some time. Barclays and HSBC have set aside a combined £4.5bn for bad debts in their results for the first quarter.

Rose said: "It's widely expected that the coronavirus pandemic will continue to have a serious impact on the economy, and consequently impact our performance, especially over the short-to-medium term. Along with the board, my executive team and I are actively managing against that disruption,