UK banks bolster debt collection teams ahead of first Covid loan repayments


Tuesday 06 July 2021 10:43

Britain’s four biggest banks have hired more than 750 debt collectors in a bid to handle a wave of potential defaults

Britain’s major banks are bolstering their debt collection teams as the first Covid emergency loan repayments come due.

Britain’s four biggest banks have hired more than 750 workers into their debt collection units in a bid to handle a wave of potential defaults.

NatWest has hired 150 additional staff to handle continued Covid loan repayments, while HSBC has hired nearly 200 additional staff.

Read more: UK bank profits more than halved

However, banks are training staff to enable them to understand a borrower’s situation, particularly if they are in financial difficulty and struggling to repay Covid debts.

The initiative aims to prevent a repeat of the aftermath of the 2008 financial crisis, where banks suffered enormous reputational damage as a result of rolling out cumbersome debt repayment processes.

“We’ve had bootcamp training to make sure they’re all ready to go,” Hannah Bernard, head of corporate banking at Barclays, told Reuters.

The UK government initially estimated that losses on the most popular bounce-back loan scheme which allowed small businesses to borrow up to £50,000 could be as high as 60%, given credit problems and fraud.

If so, the tactics employed by banks to repay their debts will come to light given the high level of debt collection activity they are expected to undertake.

“What we do better now, and it’s not just banks but I think society, is to better understand vulnerability, people’s stress and the connection between work and personal life,” Amanda said. Murphy, head of commercial banking at HSBC.

The move comes as the Public Accounts Committee, the watchdog charged with monitoring public spending, warned last week that taxpayers could lose tens of billions of pounds from support schemes put in place to limit the impact of Covid-19.

Read more: Taxpayers could lose billions from pandemic support programs

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