Member Article

Government advisor's damning evidence of bank misbehaviour

A senior advisor to the Department for Business, Innovation and Skills, has today filed a report that shines a light on “disturbing” patterns of behaviour by banks towards businesses.

Lawrence Tomlinson, founder of Yorkshire’s LNT Group and “entrepreneur in residence” at BIS gathered evidence of cases where businesses were deterred from accessing finance, even before the application stage.

Mr Tomlinson’s findings, which detail 19 case studies, are to be handed to Vince Cable. He reports that many businesses were afraid to speak out about their experiences for fear of reprisal from their banks.

The report is supported by quotes from ex-bankers, many of them disillusioned with their former employers’ attitudes towards business lending.

One anonymous, supposed ex-banker is quoted as saying: “I was fed up of being a well-paid post box for the businesses to apply and for the bank to deliver their response.

“The centre frequently overrode the decisions which were made by relationship managers… The idea was to lend as little as you have to in order to remain ahead of your competitors but make sure you got as much out of it as possible.”

Mr Tomlinson urged businesses to submit evidence to RBS’s ongoing review of its lending practices, as one means to repair the relationship.

He said: “I knew there was a lot of animosity towards the banks but the response I received was overwhelming.

“There is a complete lack of trust towards the banks, and in many cases, this is for a justifiable reason.

“This is coupled by an astonishing fear of the banks, no-one dares tell it as it is! It only takes the silence a few good men for bad behaviour to triumph. How can we increase lending when there is this level of distrust and the message remains ‘business as usual’ in the banks? It is time for growth not greed.”

This was posted in Bdaily's Members' News section by Tom Keighley .