The Royal Bank of Scotland went first. In the second week of March 2020, as coronavirus spread across Europe, the state-controlled lender told homeowners with mortgages at RBS or NatWest that they could skip payments for up to three months if the outbreak hit their income.
The detail that matters is the condition. Nobody gets an automatic holiday. An RBS spokesperson said each customer’s situation would be assessed “on a case-by-case basis”, and the bank acknowledged that someone might fall into difficulty through “loss of income”. The bank also told customers who were struggling to get in touch. None of the lenders that spoke up that week defined exactly how badly a customer had to be hit to qualify, Sharecast noted.
What else is on the table
Across RBS, NatWest and Ulster Bank, hit customers also get three months off loan repayments, let them raise credit card limits for a time, and release money from fixed savings accounts without a penalty. Fees on credit card cash withdrawals are to be dropped or refunded, and the cash withdrawal limit goes up to £500. The government owns 62% of the group, which plans to rebrand as NatWest later this year.
TSB set a shorter ceiling. It said personal customers could defer mortgage payments for two months. Barclays said it would waive penalty charges for early access to fixed savings and let card holders apply for a temporary limit increase.
Small businesses
Companies got their own packages. RBS set aside £5 billion for emergency loans to small firms and scrapped borrowing fees for those caught by disrupted supply chains and thinner footfall. It had already contacted more than 5,000 business customers with offers that included loan repayment holidays of up to six months.
Lloyds Banking Group, Britain’s biggest domestic lender, put £2bn into arrangement-fee-free finance for firms with turnover up to £25m, and said it would consider payment holidays for the worst affected. “We want to provide reassures to them that, if needed, we are here to help with additional working capital,” said David Oldfield, its group director for commercial banking. Barclays offered 12-month capital repayment holidays on existing loans above £25,000.
The British moves came just after Italy’s deputy economy minister, Laura Castelli, said all residential mortgage payments there would be suspended while the country stayed locked down.
Sources
- RBS and NatWest Offer Mortgage Holidays for Customers Affected by Coronavirus
- UK banks commit to supporting coronavirus-hit customers – Sharecast.com
