None of the firms – which have included care home operators, green grocers, family retailers and farmers – is benefiting from low Bank Rates as they are locked into uncompetitive rates, and face onerous break fees if they try to terminate the swaps early reports The Telegragh.
An RBS spokesman said “Less than 1 per cent of our SME customers currently have interest rate hedging facilities.” The bank has 1m business customers with sales of less than £25m a year – the definition it uses for SME. One source said the volume of customers affected was in the “low thousands”.
RBS’s decision to be open is in marked contrast to Lloyds, HSBC and Barclays, all of whom refused to reveal how many SME customers were sold swaps.
All four banks deny wrongdoing and say the products were explained and appropriate for their customers. They point to the low numbers of formal complaints received by the Financial Ombudsman Service, which can assess cases from firms with fewer than 10 staff and a turnover of less than €2m (£1.7m).