RBS retail boss defends bank’s choice to ditch teaser rates

The head of retail banking at Royal Bank of Scotland has come out in defence of the 73 per cent taxpayer-owned lender’s decision to end promotional, or ‘teaser’ rates on their financial products.

The introductory bonuses boost the interest received in the first 12 months after an account is opened but have been discontinued at the Edinburgh-based bank since 2014.

The RBS Group, which also includes NatWest, has argued that the rates, which City watchdog the Financial Conduct Authority (FCA) is currently reviewing, make accounts difficult for customers to compare when shopping around.

Les Matheson, chief executive of personal and business Banking at RBS and NatWest said customers found the rates difficult to understand and to compare, with people often forgetting to switch accounts once the bonus rate had expired.

Last year, the bank also stopped offering 0 per cent periods on its credit cards, during which cardholders pay no interest on their balance. Once the 0 per cent period ends, cardholders will pay a higher interest rate - at the moment, often about 18.9 per cent APR on their purchases.

Criticising the offering of other High Street banks, Mr Matheson said they relied on customers paying the higher rate of interest.

“We don’t think that’s a good way for people to manage their finances, so we’ve stopped doing that,” he said.

Mr Matheson said he agreed with FCA proposals to remind customers when a bonus period was about to end, but argued the proposals did not go far enough. The FCA has said its review is not being carried out with a view to banning the rates.

RBS and Natwest offer 0.5 per cent interest on all their savings accounts. He admitted that the rate was not very high, but insisted it was more than some customers received elsewhere.

“Rather than people having to continually switch, let’s just give them a fair everyday rate,” he said.

Talking in an interview with the BBC, Mr Matheson also defended banking group’s decision to close 100 branches this year. He said that in some cases, only six people had been regularly going into a branch.

He pointed to an arrangement with the Post Office that allows customers to access banking services and mobile banks that will move between locations.

“If you actually look at the number of access points that a customer has, they are far, far, more today than five years ago,” he said.