RBS 'has no plans for redundancies' as Covid-19 drags on

The Royal Bank of Scotland has said it has no plans for sweeping redundancies as coronavirus has put pressure on businesses across the country.

On a call with investors, chairman Sir Howard Davies said the company was trying to keep costs low while the coronavirus crisis drags on.

“At this point we are not envisaging a large redundancy programme,” Sir Howard said.

“The British banks in general, and RBS in particular, went into this crisis far stronger than they were when we last had a financial crisis over a decade ago,” he added.

The banks have much higher reserves now than the 2008 financial crisis, which severely hurt RBS. Last year, the Bank of England ran a stress test on all the major banks.

“We came through that with a comfortable margin,” Sir Howard said.

However, he sounded a note of caution: “We do not know at this point how severe the economic crisis will be, or how long the lockdown will be.”

Chairman: The bank's Sir Howard Davies. — Chairman: The bank’s Sir Howard Davies.

It comes as the bank, which also owns NatWest, revealed it had lent around £1.4bn to small businesses under the Government’s coronavirus interruption loan scheme.

They money has gone to around 7400 small businesses across the country, RBS said.

“We have been enthusiastic participants because we do see that as an important scheme,” Sir Howard said.

RBS also revealed it has mandates worth £3.1bn for the Covid Corporate Financing Facility – a Bank of England-backed scheme to support larger companies through the coronavirus crisis.

This scheme is separate from the small business support, and only open to companies with investment-grade ratings.

Earlier on Wednesday, Barclays revealed that it had lent around £738m to small businesses as part of the government-backed loan scheme.

Sir Howard was speaking alongside chief executive Alison Rose at RBS’s annual general meeting, held online due to coronavirus restrictions.

All resolutions were passed at the meeting, although 9.8% of votes were cast against the company’s remuneration package for its directors.

The bank will present its quarterly results on Friday.