Reports on Tuesday (May 14) said that Nationwide Building Society, Investec Bank and The Co-operative Bank have secured a combined $103.32 million, with the majority of it — $64.58 million — going to Nationwide. Investec and The Co-operative Bank were each granted $19.37 million, reports noted.
Regulators mandated that RBS set aside $1 billion to grant to industry competitors, as the U.K. banking sector faces continued pressure to improve services and ramp up competition.
However, the initiative is not without controversy. With the latest round of winners now announced, analysts are noting that CYBG‘s second snub could suggest that BCR is favoring younger institutions.
“We suspect that CYBG might feel a sense of injustice,” said Investec Analyst Ian Gordon, according to the Evening Standard. “The award criteria seemingly favored ‘newer’ banks over incumbents.”
Earlier this year, BCR announced the first round of recipients, which included Metro Bank, Starling Bank and ClearBank — a decision that also flared controversy and critique. When the first round of winners was announced in February, reports noted that CYBG — owner of Clydesdale Bank, Virgin Money and Yorkshire Bank — was snubbed. At the time, CYBG said it would “continue with its successful, existing [SMB] growth strategy.”
Metro Bank, which secured the largest portion of funds in that round, raised concerns that BCR did not adequately consider the bank’s revelations of misclassifying commercial loans, an accounting error that previous reports warned might force the institution to halt its growth plans.
BCR’s decision to award funds to challenger bank Starling Bank during that first round raised controversy, too, with some critics calling BCR Executive Director Aidene Walsh’s relationship with Starling CEO Anne Boden a conflict of interest. At the time, reports noted that Starling wrote to BCR Committee Chairman Lord Godfrey Cromwell, warning of “a potential conflict of interest” in its pursuit of RBS funds.