RBS to Boost Lending to Small Businesses

As the UK government and financial organisations claim that UK banks are unwilling to lend to SMEs, the Royal Bank of Scotland makes a decision to boost lending to small businesses in the remaining months of 2011.

In its latest statement, the Royal Bank of Scotland (RBS) said that it will boost lending to small and medium business in the UK by at least 15% in the fourth quarter of 2011.

The bank plans to achieve its goal by lowering interest rates, cutting upfront fees and cancelling early repayment penalties.

Commenting on the bank's initiative, Stephen Hester, chief executive of RBS, said: "We know we have a responsibility to back the small businesses in our communities that want to play their part in the UK's recovery." His colleague, Chris Sullivan of the RBS' corporate division highlighted that "This economy needs confidence and there is no bank that is better placed to give it than RBS-Natwest."

To recover the costs of this move, RBS will need to lend additional 10% to SMEs.