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RBS extends switching scheme for business customers
23rd Jun 2020 08:31
(Sharecast News) - Royal Bank of Scotland said it had extended an account switching scheme for business customers by six months so they could to take advantage of incentives to move to other banks.
"As a result of the on-going Covid-19 pandemic, fewer customers have been switching under the Incentivised Switching Scheme (ISS) and these changes are being announced by the Banking Competition Remedies to preserve momentum and aims of the ISS," RBS said on Tuesday.
Around 200,000 additional RBS and NatWest plc business banking customers with turnover of up to £1m pounds would have the opportunity to participate from August 25, it added.
Customers will be able apply to switch their account until February 28, 2021 and will have until June 30 that year to complete the switch.
RBS said the total number of customers targeted to switch under the scheme would not change and the amendments would therefore have no material impact on its current financial outlook.
The ISS will terminate at the point the £225m fund for business current account switching has been distributed by BCR, which may be earlier than the dates above, RBS said.
The scheme was set up in 2017 and provided funding of up to £275mln to encourage customers of former RBS unit Williams & Glyn to switch to other banks in an effort to promote competition.
Analysts at Shore Capital said customer switching has been below the levels anticipated.
"This has been blamed in the statement on the on-going Covid-19 pandemic but, in reality, switching levels were running well below target even before its onset," the broker said.
"This, to us, suggests that the competition authorities are trying to solve a problem that simply does not exist and that customers, despite considerable incentivisation, do not want to switch to an alternative provider that may not have the same product range and capabilities as RBS."
"As a result of the on-going Covid-19 pandemic, fewer customers have been switching under the Incentivised Switching Scheme (ISS) and these changes are being announced by the Banking Competition Remedies to preserve momentum and aims of the ISS," RBS said on Tuesday.
Around 200,000 additional RBS and NatWest plc business banking customers with turnover of up to £1m pounds would have the opportunity to participate from August 25, it added.
Customers will be able apply to switch their account until February 28, 2021 and will have until June 30 that year to complete the switch.
RBS said the total number of customers targeted to switch under the scheme would not change and the amendments would therefore have no material impact on its current financial outlook.
The ISS will terminate at the point the £225m fund for business current account switching has been distributed by BCR, which may be earlier than the dates above, RBS said.
The scheme was set up in 2017 and provided funding of up to £275mln to encourage customers of former RBS unit Williams & Glyn to switch to other banks in an effort to promote competition.
Analysts at Shore Capital said customer switching has been below the levels anticipated.
"This has been blamed in the statement on the on-going Covid-19 pandemic but, in reality, switching levels were running well below target even before its onset," the broker said.
"This, to us, suggests that the competition authorities are trying to solve a problem that simply does not exist and that customers, despite considerable incentivisation, do not want to switch to an alternative provider that may not have the same product range and capabilities as RBS."