Royal Bank of Scotland (RBS), which has been ordered to dole out more than $1 billion to industry competitors, is ready to receive applications for the funds, according to reports in the Evening Express on Tuesday (Aug. 21).
The funds come in the form of RBS’ Capability and Innovation Fund as well as the Incentivized Switching Scheme, both of which are designed to promote competition in the U.K.’s financial services (FinServ) sector and encourage small businesses to switch providers. The funds were established as part of an agreement with the Treasury and the European Commission, as an alternative to RBS divesting its Williams & Glyn subsidiary.
A year after the funds were announced, RBS is reportedly readying to allocate those funds via the independent Banking Competition Remedies (BCR) body. The BCR said it has sent invites to “eligible bodies” — which include banks, lenders and FinTech companies — to apply for the funds at an event later next month. The invites were reportedly sent directly to the CEOs of the invited firms. According to the Evening Express, not all invitees are expected to attend the event, and fewer will be eligible for the funds.
One financial institution (FI) expected to apply is CYBG, which recently announced a planned $2.2 billion acquisition of Virgin Money. TSB Bank and challenger bank Starling are also expected to attend the event, reports said.
Previous reports have confirmed other FIs that will seek out part of RBS’ funds, including Metro Bank, which announced earlier this year that it has spent more than $760,000 on its application preparations. Mortgage lender Nationwide Building Society also said in May that it applied for a grant worth more than $67 million from RBS.
The largest grants will be awarded to FIs that already have “substantive” current account offerings in place, reports said, with the BCR planning to allocate funds for FinServ players to further develop and advance their product offerings.