Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Business News

RBS to delay repossessions for six months

Royal Bank of Scotland announced today that it would give struggling homeowners at least six months before launching repossession action.

The NatWest parent said it was doubling the three-month breathing space currently offered to borrowers who fall behind with mortgage repayments.

News of the move comes days after the Government bought 58 per cent of the bank's shares for £15bn - effectively bringing it under state control.

Stephen Hester, chief executive of the Royal Bank of Scotland, wrote in the Financial Times today that the bank was "conscious that many people face anxiety" about repayments in the tough economic climate.

He said: "In our UK residential mortgage lending, and as a banker to small businesses, we are determined to serve customers well in the difficult times ahead and have commitments to Government that we intend to meet in letter and spirit."

It is expected that other banks may also follow suit as the Government calls for greater help from banks for cash-strapped borrowers and businesses.

MPs are also reportedly working on plans for statutory codes of practice in the banking industry, which could replace the current voluntary system.

The move by RBS comes amid pressure from Chancellor Alistair Darling to ensure banks do more to help households in the current economic downturn.

RBS has already announced that it will guarantee overdraft rates and contracts for its business customers for at least a year. It will also return to "normal" lending levels, as part of the Government's recapitalisation package for the banking sector.

Mr Darling told the Observer yesterday: "You know they are getting something from the Government. They have to realise that the taxpayer's going to get something in return."

RBS and NatWest have about 7 per cent of the mortgage market, smaller than rivals such as Lloyds TSB and Halifax Bank of Scotland.