It is thought that RBS could be forced to jettison up to 10% of its small business customers as a part of a deal with the European Commission.
This would be equivalent to around 120,000 customers although many industry observers believe the final figure could be half this.
There are particular fears that the weakest customers who find it hardest to access finance will be the first to be ditched.
RBS is the biggest SME lender in the UK, dealing with 1.2 million or one in four companies in the sector, putting it slightly ahead of Barclays.
Any cutback could have a disproportionate effect north of the border. The Scottish Government estimates RBS accounts for 40% of the small business lending market, slightly ahead of the
now-combined market shares of Bank of Scotland and Lloyds TSB.
A spokesman for the Federation of Small Businesses said: “If RBS is going to have to get rid of 10% of its small business customers where are they going to go? Conservative estimates state that three quarters of the SME market is dominated by two players.
“If you remove one of these players, is that good for competition?”
Larger firms have been better able to tap into alternative forms of finance, notably corporate bond markets, since the credit crunch hit but these are not open to small firms.
New or expanding banks such as Tesco Bank and the institution being set up by Panmure Gordon analyst Sandy Chen are focused on the retail market.
RBS chief executive Stephen Hester himself said last week that cutting RBS’s small business book would be “destructive” for the customers involved.
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