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May 5, 2008

RBS ends free business banking

by Gill Montia

Story link: RBS ends free business banking

A Royal Bank of Scotland spokesperson has confirmed a report that has appeared in the Guardian newspaper, stating that the bank is to end free banking for its business customers.

Speaking on behalf of RBS, Carolyn McAdam said that the move would affect only a few thousand of the group’s one million business customers.

It is understood that from the beginning of June, start-up customers will still benefit from free banking but other business customers will pay RBS’s standard tariff rates, which include a fixed charge of £120 a year.

The move comes as the bank prepares for a rights issue aimed at raising £12 billion from its disgruntled shareholders, who earlier this year were told by RBS chief executive, Fred Goodwin, that no such fund raising would be necessary.

Alongside the rights issue, the bank is attempting to raise around £7 billion from the sale of its insurance business, which includes Churchill, Direct Line, Privilege and NIG brands.

Bankinter of Spain is reported to have approached RBS with regard to the sale of its stake in Linea Directa, for around £350 million.

The Spanish insurance business is held as a 50/50 joint venture between both banks.

 

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