There is no prospect of the UK government moving soon to sell its 62% stake in Royal Bank of Scotland, according to its chairman.
Howard Davies was speaking at the bank’s AGM, which was held online due to social distancing restrictions.
He said ministers – and the bank – have other priorities at the moment.
Asked by one shareholder about cost-cutting, he said the bank remains busy, and he does “not envisage any large-scale redundancies”.
However, he added the bank is learning to be more efficient, with up to 50,000 staff working from home, so it could learn ways to reduce its office space.
Staff have been guaranteed pay for six months if their ability to work is affected by coronavirus.
While reflecting on profitable accounts for 2019, the annual general meeting was dominated by the current crisis afflicting customers of RBS.
Howard Davies said the pandemic had “changed everything” and its impact on society and the economy would probably be “stark and long-lasting”.
Among shareholder questions, there were challenges to the decision not to pay dividends, about the adequacy of protection against impaired loans or cyber-attacks on video-conferencing.
The share price has fallen to around 115 pence. That is half its level at the start of the year, largely reflecting the decline in the economy and the risks of impaired loans through the recession.
The chairman said Royal Bank of Scotland entered the downturn in a much stronger position than the last financial slump.
While reassuring shareholders about the level of risk RBS is taking on, he added a note of caution, saying: “We do not know at this point how severe the economic crisis will be, or how long the lockdown will be.”
Updating shareholders on the extent of activity by RBS, chief executive Alison Rose said it is lending £4bn for business customers through a working capital fund.
Capital repayment holidays on loans are being offered for up to six months. The government-backed Coronavirus Business Interruption Loan Scheme (CBILS) is being offered through Royal Bank, with 7,400 approvals so far, valued at around £1.4bn.
The CBILS scheme for larger companies, launched last week, has had applications for £29m – which may strike some as a disappointingly low figure to the government.
The scheme of 100% government-backed loans for smaller firms, up to £50,000, starts from next week. And for large corporates, Royal Bank of Scotland has arranged facilities worth £3.1bn for 13 of its clients.
In 2008 and 2009, RBS required £45bn of capital injection from the UK government and more than £300bn of its assets insured by the state.
It has since shrunk to become almost entirely a UK and Irish bank, while continuing to have the largest number of business customers. The government stake, which was 82% of RBS, has been sold down to 62%.
RBS is rebranding during this year so that the parent company will be known as NatWest, the brand known to most of its customers in England and Wales.
Royal Bank of Scotland will continue to be used in Scotland and Ulster Bank in Ireland.