Source - SMW
Royal Bank of Scotland said changes to a government scheme that forced it to reduce its market share were not expected to materially impact its financial outlook.

The so-called incentivised switching scheme, or ISS, was introduced by the UK government after RBS received state financial support in 2008 and 2009 in the wake of the global financial crisis.

At the time, RBS made a commitment to help increase competition in UK business banking and reduce its market share.

On Tuesday, RBS said it welcomed announced changes to the scheme because it gave the bank more certainty.

'As a result of the on-going Covid-19 pandemic, fewer customers have been switching under ISS and these changes are being announced ... to preserve the momentum and aims of the ISS,' RBS said.

'Bringing forward these changes now, which might otherwise have been implemented at a later date, provides RBS with greater certainty.'

RBS said it had entered into an amendment to a 25 April 2018 framework that allowed 200k additional business banking customers, with turnover of up to £1m, to have the opportunity to participate from 25 August 2020.

Also, the duration of the period under the ISS for customers to apply to switch their account would be extended from 25 August 2020 until the end of February 2021.

'These amendments to the ISS do not change the total number of customers targeted to switch under the scheme,' RBS said.

'As a result, there is no material change anticipated to the current financial outlook for RBS.'

'The existing requirement on RBS to make a potential further contribution to the ISS, should customer switching be insufficient under the Deed, remains capped at £50m.'

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