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Is it a case of too little, too late for RBS lending audit?

Every new day brings us another ‘green shoots of recovery’ story in the media. Of late we’ve had positive manufacturing data, retail sales up, apparently the UK never even entered a second recession (technically speaking), and there’s even talk, shock horror, that GDP growth might actually have exceeded ONS forecasts and be revised up later this month. Now that would be something.

This is all excellent news, and on Wednesday we had more, this time, shock horror, from RBS, who have announced a major audit of the way they assess loan applications of SMEs.

The review will, according to RBS, examine how the bank makes its lending decisions, and will take the views of customers, business groups like ourselves, regulators, and the government.

Going a step further, RBS will even lay on a dedicated website through which SME customers can give their experiences of their lending processes. The review will take place over the summer, with the findings and the all important recommendations published in the autumn.

RBS says that the purpose of the review will be to identify steps it can take to improve its support to SMEs and assist with the wider economic recovery, while maintaining safe and sound lending practices. All very commendable. RBS are one of the big banks, and if this means they pull up their boot straps and resume proper, meaningful lending to SMEs, that’s a really positive move.

If you’re anticipating a ‘but’,  you’re right.

It’s great to see a bank proactively working with their business customers this way, but to be frank, why has it taken this long? The economy, it seems to many, is starting to fire on all cylinders again, and this is without many of the banks doing much to help over five long years. It’s a pity they didn’t take stock of their lending processes years ago when the economy was really sinking, maybe then the green shoots news we are seeing now would have come sooner.
 
Maybe the green shoots would be now a lush meadow?

Banks have been risk averse for far too long, but if this is a serious change of direction from a lender like RBS that’s great news for those firms seeking credit. 

SMEs need cash to grow, deliver employment, and create wealth, so the end result of this process could be key to business growth in the months ahead.

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