* RBS chairman Davies tells AGM banks can cope with bad loans
* Crisis makes further state share sales soon unlikely - Davies
* Bank remains 62% owned by taxpayers following 2008 bailout (Adds further quotes, context)
By Iain Withers and Sinead Cruise
LONDON, April 29 (Reuters) - Royal Bank of Scotland said on Wednesday it was doing what it could to offer government-backed loans to businesses being hammered by the economic fallout from the coronavirus outbreak.
Chairman Howard Davies made the comments after banks have been criticised for not getting cash to struggling companies quickly enough.
Speaking to investors at the bank’s annual investor meeting - held over webcast to comply with social distancing rules - Davies said the bank would try to build loyalty with businesses by providing funding lifelines.
“(Customers) then remain loyal to you because they have a good memory of the people who stood by them when times were tough,” he said.
The government has tasked Britain’s banks with delivering more than 330 billion pounds ($410.4 billion) worth of state-backed loans to struggling businesses, but many firms have found support hard to come by and the application processes unwieldy.
RBS had approved around 7,400 so-called ‘CBILS’ loans to the value of 1.4 billion pounds as of April 23, the most of any British bank. The bank had also delivered 3.1 billion pounds of support to larger businesses under a separate scheme, it said.
Davies said the sharp fall in RBS’s share price during the crisis made it unlikely the government would sell further stock in the state-backed bank soon.
RBS - which is rebranding itself NatWest at group level later this year - remains 62% owned by taxpayers after its 45 billion pound bailout in the 2008 financial crisis, which was followed by years of scandals for mistreating customers.
Chief Executive Alison Rose said the bank was doing “more than any other” in this crisis to deliver the government’s support schemes.
“Every person, family and business has been affected by the current situation and the group have been doing all we can to support our customers and the communities we serve and will continue to do so long after this first phase of response has ended,” Rose said.
Davies warned the outbreak had “changed everything” and its impact on society and the economy would likely be “stark and long-lasting”.
The country’s largest banks – including RBS – are announcing first quarter results this week, with Barclays and HSBC already setting aside billions of pounds to cover an expected spike in bad loans due to the economic impact of the outbreak.
Davies said an increase in impairments across the industry was an “inevitable part of recession” but said banks were well capitalised and able to cope.
He said the bank was committed to returning capital to investors in time, after the company scrapped dividends until next year at the earliest following pressure from the Bank of England on lenders to conserve capital.
All of RBS’s resolutions passed in proxy voting conducted for the AGM. ($1 = 0.8041 pounds) (Reporting by Iain Withers and Sinead Cruise; Editing by Emelia Sithole-Matarise)