Nationwide abandons move into business banking

Wednesday 8 April 2020 04:53 CET | News

Nationwide, a UK-based mutual financial institution, has abandoned a move into business banking due to the impact of coronavirus.

This announcement caused further disruption to a government scheme aimed at boosting competition in the sector. Together with Metro Bank, the bank received a GBP 50 million grant from Banking Competition Remedies (BCR) to reduce the dominance of Royal Bank of Scotland in the small business banking market following its government bailout during the financial crisis.

Alongside the cash grants to fund investment, BCR has made GBP 350 million available to pay RBS customers to switch to rival banks, but the switching scheme was far behind schedule even before coronavirus.

However, with the new announcement, Nationwide said it would return the fund, after the Bank of England’s emergency interest rate cuts meant its business plan was ‘no longer viable’. Nationwide is the second challenger bank to hand back some of the cash provided by RBS and awarded through the scheme. In February 2020, Metro Bank also returned GBP 50 million after it slashed its growth plans.

Banking Competition Remedies, the body managing the scheme, said it would outline the rules of a new contest to distribute Metro Bank and Nationwide’s prizes by the end of April 2020.

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Keywords: Metro Bank, Nationwide, banking, online banking, funding, UK, Banking Competition Remedies, BCR
Categories: Banking & Fintech
Countries: United Kingdom
This article is part of category

Banking & Fintech