Banks pay £158m swaps compensation
Banks have increased the pace of granting compensation to small businesses over allegations that they were mis-sold complex financial products, with pay-outs reaching £158.6 million in December.
It means the total nearly doubled in just a month, after standing at £81.2 million at the end of November, according to figures from the Financial Conduct Authority (FCA).
However the figure represents just a small proportion of the £3 billion set aside by major lenders so far to cover the costs of making redress to victims - though that figure will also include the expense of administering the scheme.
The FCA has previously written to the chief executives of Royal Bank of Scotland, HSBC, Barclays and Lloyds urging them to increase the pace of compensation for the interest rate swap products.
Martin Wheatley, head of the City regulator, has said the delays compound the unfairness of selling a complex product to companies without an understanding of the risks, leaving many struggling to make ends meet.
But the FCA adopted a more positive tone when it issued its monthly update on the scheme today.
It said a total of 1,040 offers of compensation had been accepted by customers by the end of December, up from 547 in November.
Director of supervision Clive Adamson said: "Banks have picked up the pace since November; we asked that they focus their efforts on making far more rapid progress in assessing individual cases and crucially in providing redress.
"May remains the target for all offers to have been sent out and the banks involved are working towards that. Any affected business that has been invited to join the scheme and hasn't needs to act now so they can receive the redress they're due."
A total of 18,700 customers had been invited to join the review by the end of December.
Anthony Browne, chief executive of the British Bankers' Association, said: "Anyone who wrongly suffered as a result of having been mis-sold an interest rate hedging product will get appropriate and fair redress.
"Banks are working hard to complete the reviews and as the regulator notes today the process is speeding up."
John Allan, national chairman of the Federation of Small Businesses, said: "It is good that that the banks are finally making headway in offering redress for mis-sold rates swap agreements with over £158 million paid out, but there are still an estimated 40,000 businesses awaiting redress.
"The banks must not get complacent and making swift progress in paying the remaining redress is the only way to rebuild trust."