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Royal Bank of Scotland Group Plc says it will aim to emulate payday lenders by providing loans within minutes, but if it wants to boost its unsecured credits, it is going to have to fight a tough battle to expand its share of U.K. current accounts.
RBS' head of personal and business lending, Les Matheson, said he wants to make it radically easier for customers to obtain loans as the government-controlled bank pushes ahead with its £1 billion program to upgrade its retail offer, according to an interview with the Financial Times published July 6.
Speeding up processing times is all well and good, so long as it does not entail any fall in credit standards, said analysts. But the bank needs to make sure it has an expanding source of cheap deposit financing to match any loan book growth.
And here it is where things get more complicated for the bank, which trades at less than 0.9x tangible book, compared to more than 1.5x for its domestic rival Lloyds Banking Group Plc. The latest current account switching index from research firm TNS showed RBS among the biggest net losers, with a net loss of 3% of all people changing account provider in May. RBS unit National Westminster Bank Plc had a net loss of 2%.
"Their success in penetrating the various lending segments, including unsecured, where they do have a push, will depend on how successful they are in terms of current account...