LONDON (Reuters) - British state-controlled lender the Royal Bank of Scotland has doubled its funding pot to support small businesses to 6 billion pounds ($7.8 billion), but says the extra cash is no longer primarily for Brexit-proofing businesses.
NatWest, the biggest trading arm of RBS, said it had topped up its so-called Growth Fund in response to high demand from firms in industries including green energy and technology.
The lender previously topped up the fund from 1 billion pounds to 3 billion pounds in October. It said at the time that it was doing so after identifying nearly 2,000 businesses it lent to that were likely to suffer payment or supply problems due to Britain’s exit from the European Union.
Since then, Brexit has been repeatedly delayed amid deadlock in parliament and it is now unclear how Britain will leave the EU, if at all.
Brexit remained a core driver behind expanding the fund, NatWest said, but stressed other factors.
“It’s really about demand from growth sectors in the UK economy,” Mike Slevin, head of capital management at NatWest, told Reuters.
“Obviously it remains fully available for companies that require extra support for Brexit-related purposes as well.”
Customers were unlikely to roll back facilities taken out to prepare for Brexit while uncertainty continued, Slevin said, but demand for such products has “waned somewhat” in recent weeks.
Banks have been keen to promote their small business lending credentials ahead of Brexit, but groups representing small firms have expressed scepticism.
Rival lender Barclays announced a 14 billion pound fund over three years to help small firms manage uncertainty including Brexit last month.
However, Barclays’ fund included all projected lending to small companies over a three-year period, rather than just extra cash over day-to-day funding.
A Barclays spokesperson said the 14 billion pounds would represent an increase of around a third in lending over the previous three year period.
“While it’s good to see some of the banks looking to proactively support customers during this period of uncertainty, the fact remains that lending to smaller firms continues to lag behind big corporations to the tune of millions each year,” Mike Cherry, chair of the Federation of Small Businesses, said.
Reporting by Iain Withers; Editing by Susan Fenton