New announcement made
RBS has received confirmation that an alternative remedies package announced on 26 July 2017 (the “Alternative Remedies Package”), regarding the business previously described as Williams & Glyn,has now been formally approved by the European Commission (“EC”) in the form proposed.
The Alternative Remedies Package forms the basis of a new agreement in relation to RBS’s remaining State Aid commitments and replaces the existing requirement to divest the business previously described as Williams & Glyn by 31 December 2017.
The Alternative Remedies Package is focused on the following two remedies to promote competition in the market for banking services to small and medium-sized enterprises (“SMEs”) in the UK:
- A £425m Capability and Innovation Fund that will grant funding to a range of competitors in the UK banking and financial technology sectors; and
- A £350m Incentivised Switching Scheme which will provide funding for eligible challenger bodies to help them incentivise SME customers of the business previously described as Williams & Glyn to switch their accounts and loans from RBS paid in the form of “dowries” to the receiving bank. In addition, under the terms of the Alternative Remedies Package, should the uptake within the Incentivised Switching Scheme not be sufficient, RBS may be required to make a further contribution, capped at £50m.