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RBS fails to pass on full rate cut

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by David Masters
RBS fails to pass on full rate cut

The RBS Group has announced that it will only pass on last week’s Bank of England base rate cut to some customers.

The banking group, which includes NatWest and the Royal Bank of Scotland, said those on tracker mortgages and small business with variable rate overdrafts would benefit from the full 0.5% cut.

However, individual mortgage holders on the standard variable rate will have their rate reduced by 0.25%, representing just half the base rate cut.

The bank, rescued in November from the verge of collapse using £20 billion of taxpayers money, said its decision to only pass the rate cut on to some customers was made to strike a balance between the interests of borrowers and savers.

Paul Geddes, chief executive of retail banking at RBS, said the bank was ‘cushioning’ savers from the full impact of the Bank of England’s rate cut.

He added that the Standard Variable Rate mortgage remains ‘competitive’, having been cut by 3% in the last four months.

Only HSBC, Lloyd’s TSB and Nationwide have so far passed on the full base rate cut.

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News posted: January 12, 2009

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