A review into the bank’s SME lending, to be published today, is expected to highlight the bank’s failings in converting customer conversations into business opportunities – an area it now wants to focus on.
RBS’s business bank plans coincide with its decision to create an internal “bad bank” which will be supported by RBS to separate and wind down its poor performing high risk assets.
Cable said: “I welcome the announcement today that RBS will be creating a new internal bad bank and selling its US bank.
“This will enable it to focus on business lending in the UK. It is clear that for many years RBS has handicapped our recovery by failing to provide the credit that businesses need.”
The review, carried out by Sir Andrew Large on behalf of RBS, highlights the bank’s SME lending practices are badly designed for supporting small businesses.
In response to the review chief executive Ross McEwan said: “The picture he will paint will not be an entirely comfortable one but it's one we have to confront.
“I know that a successful, vibrant, and well-regarded SME bank is central to the overall value and reputation of this company.”
McEwan said the bank must ensure its policies, processes and systems help its people to do the best job they can for customers and shareholders in this area.
He added: “We are the biggest backer of small businesses in the UK. Every year we speak to thousands of potential new small business customers but at the moment we don't convert enough of those conversations into actual new loans.”
The bank’s aim is to become the number one bank for SME customer service in the UK - including as measured in a new survey of SMEs by the Federation of Small Businesses and the British Chambers of Commerce - and to grow its lending in tandem.
