Royal Bank of Scotland Group PLC said Monday that it would wait at least six months before foreclosing on delinquent mortgages in the United Kingdom.
The waiting period applies to all customers, including those already late on payments, a Royal Bank spokeswoman said. Financial Times reported that the policy would remain in place until at least the end of next year.
The United Kingdom is urging bankers to continue lending to consumers and small businesses. A shrinking economy and higher unemployment helped foreclosures rise 12% in the third quarter.
Royal Bank, which has a 7% share of Britain's mortgage market, sold a 58% stake in itself to the government when it raised $31 billion of capital last week.
"The impact is tiny for RBS," probably about $75 million before tax, said Leigh Goodwin, an analyst at Fox-Pitt Kelton Ltd. in London, who has an "outperform" rating on the stock. "If all the banks together acted to lend more, that will be good for the economy and ultimately good for the banks."
