| LONDON, July 3
LONDON, July 3 Royal Bank of Scotland (RBS)
has commissioned a review of its lending to small
businesses, responding to concerns of a shortage of finance in a
sector seen as vital to Britain's economic revival.
The government-controlled bank, Britain's biggest lender to
small businesses, said it had appointed former Bank of England
deputy governor Andrew Large and management consultants Oliver
Wyman to conduct the review.
The British government is concerned that poor access to
finance among smaller firms may thwart a sustainable recovery
from the country's worst slump in decades.
It has launched schemes such as Funding for Lending, giving
banks cheap funding to encourage them to lend to households and
businesses, but this has failed to stimulate lending and recent
data showed business lending down on last year.
RBS said its review would focus on what steps RBS and its
NatWest division can take to support small businesses and
Britain's economic recovery while maintaining sound practices.
"Demand for lending remains a challenge, but we want to do
more than just wait for demand to materialise," said Chris
Sullivan, RBS's head of UK corporate banking. "We want to play
our part in securing the recovery."
RBS is under extra under pressure to increase lending
because the government controls 81 percent of the bank after
pumping in 45.5 billion pounds ($69 billion) to keep it afloat
during the 2008 financial crisis.
Stephen Hester, who was ousted as RBS chief executive last
month, said in May the bank had 20 billion pounds of spare cash
it was desperate to lend, but could not find takers because
businesses lacked confidence in the British economy.
($1 = 0.6592 British pounds)
(Editing by David Holmes)