SHARES in Clydesdale Bank owner CYBG plunged more than five per cent in early trading this morning as it emerged the bank had been unsuccessful in bidding for a share of funds set aside to boost competition in the banking market for SMEs (small and medium-sized enterprises).
CYBG had bid for a share of a £775 million remedies package provided by Royal Bank of Scotland to satisfy European competition concerns arising from its £45 billion bailout during the financial crisis. Royal Bank agreed to provide the funding after failing to offload its 300-strong Williams & Glyn branch network – a condition of its bailout under state-aid rules.
The big winners were from the Capability and Innovation Fund Pool A bidding process were the challenging banks Metro, Starling and ClearBank, which won grants worth a combined £280 million.
CYBG informed the market this morning that it had not received any funding, but said it remained committed to “competing at scale on the Incentivised Switching Scheme” that goes live on Monday. This will provide “dowries” of up to £50,000 to SME customers of Royal Bank’s former Williams & Glyn operation that switch to another provider.
CYBG said that it “intends to offer an attractive home to former Williams & Glyn SME customers being encouraged to leave RBS”.
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