Three of the high street's major banks are under performing in their relationship with small businesses, a report has revealed.
The report, issued by the Forum of Private Business (FPB), shows that Barclays, Lloyds TSB and NatWest are taking the interests of businesses into account far less than their smaller competitors.
A performance league table, based on a survey of 5,000 small businesses, sees these three banks propping up the bottom.
The report shows that despite the stability of the banking industry over the last two years, larger banks are being outshone by their smaller rivals when it comes to interest rates, charges, knowledge of industry, efficiency and reliability.
A significant 40 per cent of respondents banking with Barclays, Lloyds TSB and NatWest had cause to complain.
The report coincides with an award ceremony held at the House of Commons today, commending the most favourable banks among small businesses.
The awards are to be handed out by small business Minister, Nigel Griffiths, including the Best Bank award, going to the Allied Irish Bank (AIB), and the Best Clearing Bank for Small Businesses, won by HSBC for the fourth report running.
Nick Goulding, FPB chief executive, highlighted the variation in performance, reflecting the need to reopen the Small Firms Domestic Division of the Bank of England.
"It was an ill-judged move by the governor of the Bank of England, Mervyn King, to close the Small Firms Domestic Division, as it immediately reduced the protection the Bank of England can provide to the small business community." he said.
"The report clearly shows a worrying variation in bank performance when dealing with small businesses. The Bank of England cannot turn a blind eye and ignore this. Small businesses need to have the full clout of the Bank of England behind them, to ensure banks play fair and Government prioritises the issues affecting small businesses."
Below is a run down of the report’s bank performance table.
1. AIB
2. Yorkshire Bank
3. Clydesdale
4. HSBC
5. Royal Bank of Scotland
6. Bank of Scotland
7. NatWest
8. Lloyds
9. Barclays
One omission from the list is Alliance and Leicester, which picked up the award for startups bank of the year at last month's annual startups awards.
The report goes on to suggest that despite recommendations laid out by the Office of Fair Trading (OFT) on how best to switch banks, there is little evidence of businesses actually doing so.
Goulding said, “There is confusion and lack of clarity with respect to bank charges and interest on current accounts. This suggests that businesses, banks and policy makers must review and clarify the actual terms and conditions being provided.”