Royal Bank of Scotland Group, the largest bank controlled by the UK government, said it will wait at least six months before foreclosing on mortgage holders who are behind on payments.
The waiting period applies to all customers, including those already behind on payments, an RBS spokeswoman said today.
The policy will remain in place until at least the end of 2009, according to a
Financial Timesreport today. RBS sold a 58 per cent stake to the government when it raised €20 billion (€23.8 billion) in new capital last week.
The UK is urging banks to keep lending to consumers and small businesses to alleviate the worst recession for 17 years.
"The impact is tiny for RBS", said Leigh Goodwin, an analyst at Fox-Pitt Kelton in London who has an "outperform" rating on RBS.
"If all the banks together acted to lend more, that will be good for the economy and ultimately good for the banks. I would not regard this as the thin end of the wedge in terms of government influence."
Britain's biggest mortgage lenders agreed not to repossess homes within three months of the owner going into arrears, according to Chancellor of the Exchequer Alistair Darling's pre-budget report to Parliament on November 24th.
Bloomberg