SME MIS-SELLING: 10% of all SME loans fraudulent, RBS has 28% of market, other banks admitting guilt….

…but Downing Street is silent.

Osborne….what’s he going to do about this?

As the Telegraph reports this morning, the merged Clydesdale and Yorkshire Banks have circulated business customers, saying they will look at the sale of fixed-rate loans to small businesses as part of the current industry review into the mis-sale of interest rate swaps as supposed loan hedges.

They said the review would involve the notorious TBLs [tailored business loans] in a move that the Barclaygraph thinks must ‘put the pressure on other banks to take similar steps’.

The Slog has been focusing for some time on interest rate swaps as sold by RBS and other leading banks.

It is now estimated by the FSA that a staggering 40,000 interest rate swaps  have been sold to small businesses. Although often seen as a small sector in real terms, the opposite is true: over four and a half million companies in the UK employ under ten people, and the sector in total turns over £1.5trillion, accounting for 60% of all private sector employment.

Considering the way banks treat them, however, a surprisingly small percentage of SMEs use banks to raise money. This coupled with the banks’ immediate decision to cut off money supply to small businesses in the 2008-10 period produces a percentage figure for 2011 estimated at around 10% of entrepreneurs using  bank loans.

The means almost 10% of all SMEs who took out bank loans were mis-sold.

Entrepreneurs are at the heart of Britain’s future, and absolutely key to our recovery at some point. Yet here are the banks defrauding them at an obscene level….and Draper Osborne has nothing to say.

Take in this cracker from the RBS website:

‘We are committed to supporting enterprise, and in the UK we provide banking services to SME customers accounting for about 25% of the SME market. Each year we help many thousands of people to start new businesses and support many more who want to see their business grow. In challenging economic circumstances this assistance is even more vital and we place great importance on activities that stimulate economic growth. Our Specialised Relationship Managers work with stressed businesses with the aim of bringing them back to a mainstream banking relationship. In 2011 this was achieved for over 4,400 business in the UK.’

Deception and distortion at its best. This is rather closer to the truth:

‘The Royal Bank of Scotland was accused of “trying to fool people” over its lending record, by citing a controversial little-known target that it claims to have met – despite being understood to have missed the government’s benchmark measure….Bank of England data on Monday is expected to confirm that five banks, including RBS, together fell £1.1bn short of a £76bn lending commitment to small and mid-sized enterprises (SME).’

By its own measure of customers, however, it looks like roughly 25% of the mis-selling problem is down to RBS. Over the period, this taxpayer-owned bank has lied to the Bank of England, lied to potential customers online, cheated existing SME customers, and required direct Treasury input even to lower the rate at which it lends to small business.

Effectively, Stephen Hester’s Rogered Bowel Syndrome is a protectorate run by the Treasury, and Treasury behaviour is, in turn, the responsibility of the Chancellor, George Pipsqueak Gideon (dec) Oliver Cynthia St John Osborne the Little.

Isn’t it about time Bullingdon Man said something? Even better, did something?

Get the full odour of RBS malfeasance at Pester Hester