By Kristy Dorsey

A £275m scheme to encourage small and medium-sized enterprises to switch from Royal Bank of Scotland has closed with a total of 69,135 firms changing providers.

The Incentivised Switching Scheme (ISS) forms part of the Alternative Remedies programme that was launched to address EU regulators’ concerns about the £45 billion taxpayer bailout of the group formerly known as Royal Bank of Scotland during the 2008 financial crisis. The RBS Group changed its name to NatWest in July of last year.

Qualifying SMEs received dowries worth up to £50,000 if they moved to one of 10 approved alternative banks. The original plan was for the scheme to close after 120,000 had switched, or when all of the dowry was spent, with the latter achieved at the end of June after 28 months in operation.

To encourage take-up, the incentives payable were increased by as much as two-thirds in March of last year. In June of last year, the deadline for applying to change banks was moved from August 2020 to the end of February 2021.

READ MORE: Number of SMEs switching from Royal Bank of Scotland still well below target

The biggest winner among the alternative providers was digital challenger Starling Bank with a total of 16,528 new SME accounts gained via the ISS scheme. This was followed by Virgin Money, which includes the operations of the former Clydesdale Bank, with 15,946 accounts.

TSB was third with 10,731 accounts, followed closely by the Co-op at 10,371. Other large-scale beneficiaries were Santander (9,137) and Metro Bank (5,988).

Those thereafter were Handelsbanken, Arbuthnot, Habib, and Edinburgh-based Hampden & Co, with the number of accounts gained ranging from 350 to nine.

The scheme was administered by Banking Competition Remedies, whose executive director Brendan Peilow welcomed the success of the ISS programme: “Over £250m has gone directly to SMEs as a result of the dowries paid and the sector will further benefit from the awards that have been announced today.”