Royal Bank of Scotland to help out struggling home-owners
‘Breathing space’ extended to six months
Published:
STRUGGLING home-owners are to get a six-month reprieve before repossession action is launched, the Royal Bank of Scotland announced today.
The NatWest parent group said it was doubling the three-month breathing space currently offered to borrowers who fall behind with mortgage repayments.
News of the move comes days after the Government bought 58% of the bank’s shares for £15 billion – effectively bringing it under state control.
RBS chief executive Stephen Hester said the bank was “conscious that many people face anxiety” about repayments in the tough economic climate.
He said: “In our UK residential mortgage lending, and as a banker to small businesses, we are determined to serve customers well in the difficult times ahead and have commitments to Government that we intend to meet in letter and spirit.”
It is expected other banks may also follow suit as the Government calls for greater help from banks for cash-strapped borrowers and businesses.
MPs are also reportedly working on plans for statutory codes of practice in the banking industry, which could replace the current voluntary system.
In August the company unveiled its first loss in 40 years as a public company after suffering writedowns of £5.9 billion as it reported statutory pre-tax losses of £692m for the first half of 2008.
Mr Hester said: “We will focus on rebuilding RBS on its powerful customer franchises globally and, in time, deliver the economic returns that all our shareholders expect and deserve.”.
RBS is receiving the biggest injection of public funds under the Government’s £37bn bail-out package announced in October.
The Treasury is also pumping £17bn into merging banks Halifax Bank of Scotland and Lloyds TSB, which could leave it with a stake of more than 40% in the combined entity.
Specialist financial services group London Scottish Bank said today it had gone into administration.
The Treasury confirmed it would protect all retail deposit savings with the bank – including those with deposits above the £50,000 maximum limit.
The Manchester-based bank said it was forced to call in administrators after suffering a shortfall in regulatory capital and was unable to find a firm buyer.
