Pressure Growing on UK Banks to Ease their Terms for Small Businesses


The UK Competition Commission is in the process of investigating a possible oligopoly being operated by the four main UK clearing banks (HSBC, Barclays, Lloyds-TSB and RSB-NatWest) in the provision of services to small businesses (SMEs). After a study lasting for 15 months the Commission will publish its findings in June 2001.

More specifically, the Commission is now also investigating the possibility that the Royal Bank of Scotland (RSB) is effectively operating a monopoly by taking up as much as 25% of SME business since its acquisition of NatWest Bank early in 2000.

In 1999 a joint report by the Treasury and the Department of Trade and Industry concluded that services for UK small businesses are significantly more profitable than any other area of retail banking. Average returns were put at 36% compared with an average of 30% across the range of retail banking services.



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