Following our recent blog post on the Financial Conduct Authority and UK Finance statements on the COVID-19 outbreak, we look at what the reaction has been so far in the banking market to provide support to businesses and individuals.

NatWest has announced the initial support it will provide to small and medium sized enterprises (SMEs) across the UK. The range of measures announced by NatWest includes committing an additional £5bn to support businesses with working capital finance, loan repayment holidays for borrowers with cash flow issues caused by the outbreak and temporary, fee-free emergency loans. NatWest has also committed to providing advice and support to SMEs with their contingency preparations for dealing with the outbreak.

RBS and NatWest have confirmed that mortgage customers could be allowed to defer mortgage payments for up to three months if they are in financial difficulties as a result of the COVID-19 outbreak. Other potential short-term solutions offered by the bank could include temporary increases to credit card limits and an increase in the debit card withdrawal limit. NatWest/RBS has confirmed that these measures will be assessed on a case-by-case basis.

Santander has placed a message on its website encouraging business customers to contact the bank if they have any coronavirus-related concerns with their business. Santander has confirmed that it will consider each customer’s position on a case-by-case basis to look at different ways they can provide support to them – for example, potentially deferring or reducing loan repayments.

Lloyds Banking Group has announced that it was ready to support small UK businesses affected by COVID-19. Lloyds confirmed that it has set aside £2bn which it will use to provide arrangement fee free finance to small businesses with up to £25m turnover. The purpose of such loans would be to support businesses with cashflow issues, caused by interruptions to supply chains or due to high staff absences.

Barclays has similarly announced that it would be able to offer 12-month repayment holidays on loans over £25,000, as well offering lending support to businesses via new or extended overdraft facilities.

In general, it is being widely reported that banks are ensuring that relationship managers are contacting their customers to find out what, if any support, is required in the short to medium term. The sentiment in the banking market appears to be that banks will look to be as flexible as possible with existing business and personal accounts in these uncertain times, while offering further financing to businesses which are disrupted by the ongoing COVID-19 situation.

The Bank of England has also announced a range of measures designed to support banks and businesses. Those measures include a drop in the interest base rate and a funding scheme to assist banks and building societies with their ability to make lending available to customers at an affordable level. The central bank’s measures are explored in further detail in another post on this blog.