Survey reveals growing anger with banks

A survey carried out by the National Federation of Builders (NFB) shows widespread discontent among the body’s members at their treatment by the banking sector.

A third of those surveyed said they were dissatisfied with their bank and 40% said their relationship had deteriorated in the past year. The NFB said these statistics were worrying given that 53% of firms said their relationship with their lender would be “very important” to success over the coming year.

The federation said sound businesses were being refused capital because they were in the construction industry.

Others complained about harsh terms. Almost 30% said interest rates had increased on their credit facilities and 22% said their bank had failed to pass on a base rate cut in the past year.

The NFB warned that conditions would be “far worse” in 2010 and called on the government to “step in where the banks were failing”.

Julia Evans, the NFB’s chief executive, said: “Many companies are going to the wall because construction is deemed too risky by lenders who are failing to lend, or even to pass on rate cuts.

“We would like to see more money being made available to SMEs using routes outside the banking sector, bypassing the banks that have chosen to close the book on builders.”

One of the firms surveyed, Yorkshire-based John Brooke Builders, said it had been trying to negotiate an agreement about its facilities for seven months with no success.

In a letter to Royal Bank of Scotland, seen by Building, senior partner John Brooke said he was “appalled” at its treatment of the firm. He said: “We’re just the sort of business I believe the government would expect the bailed out banks to be helping.”