LONDON (dpa-AFX) - Royal Bank of Scotland Group plc (RBS, RBS.L) said that it received confirmation that an alternative remedies package announced on 26 July 2017, regarding the business previously described as Williams & Glyn, has now been formally approved by the European Commission 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 or 'SMEs' in the UK: A 425 million pounds Capability and Innovation Fund that will grant funding to a range of competitors in the UK banking and financial technology sectors; and
A 350 million pounds 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 50 million pounds.
An Independent Body will be established to administer the Alternative Remedies Package. RBS will make an upfront contribution of 20 million pounds to cover certain operational expenses of the IB relating to the Alternative Remedies Package.
RBS noted that it agreed to provide separate indemnities to each of the IB and Her Majesty's Treasury (HMT) to cover liabilities that may be incurred in implementing the Alternative Remedies Package. Whilst no such liabilities may ever arise, these indemnities collectively are capped at a maximum amount of 320 million pounds. Accordingly, the Alternative Remedies Package remains consistent with the 800 million pounds provision that RBS took in relation to the expected costs of the package in H2 2016 and H1 2017.
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