Banks need to do better says the UK200Group Banking Survey

Banks could do much better in looking after their clients; according to the findings of a survey targeting owner-managers of smaller businesses from the UK200Group of quality assured accountants and lawyers. The survey, conducted via the UK200Group website and through member firms, questioned respondents on their most recent personal and commercial banking experiences. Almost two-thirds of responses (64.6 per cent) came from business customers.

Almost three-quarters of responses (73.5 per cent) concerned Barclays, HSBC, NatWest or Lloyds TSB. Other banks mentioned included Royal Bank of Scotland and Halifax/Bank of Scotland. When asked if interest rate margins had varied in the last six months, 53.7 per cent said yes. More than a quarter (27 per cent) had had offers withdrawn or varied and 13.5 per cent had had facilities removed altogether.

Where respondents had been affected by changes to rates or facilities, or offers had been withdrawn, 47 per cent said the arrangements were imposed on them by the bank and 27 per cent that the changes had taken place without notice. Only 11.4 per cent said the changes took place following negotiations.

In scoring bank performance in specific areas on a scale of one (poor) to five (excellent), around two thirds of respondents rated their bank satisfactory or better on communication, ease of seeing their bank manager, speed of response and clarity of action. However, the number of respondents giving a satisfactory or better rating on understanding client needs, living up to their advertisements and flexibility dropped significantly to around 50 per cent.

Of respondents who chose to submit additional comments, some 70 per cent were negative in tone. These included:

•  I am just a number.
•  If we were to run small business the way the banks have run their business, we would be bankrupt and unemployed.
• If they (the banks) kept to what most people thought they did, we would not be in the mess we are in now.
• I am completely demotivated to grow our business further if banks continue to receive handouts from the Revenue to support their poorly mismanaged business. If I conducted business this way, we wouldn’t exist.
• The banks are showing no flexibility or willingness to take part in either supporting or looking at growth opportunities…and are merely looking at ensuring their own jobs are kept safe.
• The government should cut the banks out the banks from any scheme to help small business and deal directly.
• (The bank) behaved very unprofessionally…the company in question had not breached any banking covenants but was told their facilities would be removed unilaterally.
• We have been with (our bank) for more than 22 years…in the wake of their behaviour over the last year, we are now actively seeking another bank.
• The banks have withdrawn from many markets since they are only looking to preserve their own balance sheets. It’s a complete waste of time trying to do business with them.
• The absolute refusal to lend to an ungeared, high equity company with security already in place is disgraceful.
• They have changed current accounts (business) to non-interest paying accounts without notice or consent.

Kevin Dickens, UK200Group president, said: “In the current economic climate, the results emerging from this survey are rather more favourable towards the banks than might have been expected. However, the fact remains that between two-thirds and a half of those surveyed thought their bank performance was less than satisfactory in key areas and it is particularly worrying that in many cases, banks are imposing changes to facilities or interest rates on clients without notice.  

With the spotlight focused very firmly on the banking sector at the moment, our survey is another indicator that banks need to tidy up their act and do a great deal better for their clients.”

If you would like more information about the survey and its results please contact Nick Forsyth on 01376 326266. 

Date:25 March 2009

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