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RBS CEO defends planned branch closures

Lawmakers urged Royal Bank of Scotland Group PLC to scrap plans to close up to 62 branches in Scotland, saying the cuts would have a "devastating" impact on communities, particularly vulnerable customers, The Telegraph reported.

The plan will result in 158 job losses and will cut the number of RBS' branches in Scotland to 89.

"We are not convinced that RBS fully appreciates the damage these closures will do to the communities and businesses that rely on these branches," the Scottish affairs committee reportedly said.

The committee also called on the British government, RBS' majority shareholder, to pressure the bank to reconsider its plan, according to the report.

In an article for The Sunday Times, RBS CEO Ross McEwan said the bank must cater to the increasing number of customers that prefer to use digital banking and payment services, noting that only less than a quarter of the population in Scotland still choose cash as their preferred method of payment.

"[W]hilst these decisions are taken in response to changing customer behavior, I recognize what is right for the majority isn't always right for all … But we can't hold back the tide of change," McEwan said.

Meanwhile, the bank has pledged to earmark an additional £1 billion to lend to small and medium-sized enterprises over the course of 2019, the Financial Times reported, citing Alison Rose, RBS' head of commercial and private banking.

The £1 billion fund, designed to increase investment in manufacturing and technology, is expected to be launched in the next few weeks, the FT added.

The move comes amid a scandal over its now-defunct Global Restructuring Group division's alleged mistreatment of small business customers as well as efforts to boost competition in the British banking sector serving SMEs.

RBS is required to set up a £755 million fund to help challenger banks invest in their business bank offerings and encourage SMEs to switch banks. The fund is part of an alternative plan to its sale of Williams & Glyn, which was a condition of its crisis-era state bailout.