Eleven lenders including Edinburgh-based Hampden & Co and Glasgow-headquartered Clydesdale Bank have been deemed eligible to tap into a £775 million Royal Bank of Scotland fund aimed at boosting competition in the banking sector.
The firms, which also include Metro Bank, Nationwide and Santander, will be entitled to a share of a £350m incentivised switching scheme aimed at encouraging small business customers to switch to a rival lender.
Arbuthnot, Co-op Bank, Handelsbanken, Monzo, Starling and TSB have also been approved for access to the fund. They will make offers to small and medium-sized enterprise (SME) customers at RBS in February.
RBS is freeing up the cash as part of conditions attached to its £45 billion state bailout at the height of the financial crisis. The money is being distributed by the Banking Competition Remedies (BCR) body.
Graeme Hartop, chief executive of private bank Hampden & Co, said: “We already looking after the banking needs of many business owners, and we are very excited to be taking part in this unique programme.”
Hampden & Co launched about three years ago with offices in Edinburgh’s Charlotte Square, as well as in Mayfair, London.
Meanwhile, a further four unnamed firms, which are not currently members of the current account switching service, have also been approved and the BCR is considering a second application window in late spring.
BCR chairman Godfrey Cromwell said “It’s very good news that a broad selection of organisations have stepped forward and made a diversity of offers right across the SME client base. [This] announcement marks an important milestone for incentivised switching.
“Customers will be the real decision-makers here. We look forward to getting through the contracting stage and seeing these offers made public so that customers can react.
“We anticipate that a further application round in quarter two 2019 will widen the range of offers still further.”
Bidding for participation in a separate £425m capability and innovation Fund, which is aimed at helping banks develop their current account, lending and payments offerings for business customers, is under way.
The process has been hit by delays, having been put nearly six months behind schedule earlier this year. However, the BCR says it is on track to deliver the distribution of the fund along a stringent timeline.