By Simon Miller
Seven more UK banks have agreed to review their sales of interest rate hedging products to small and medium size businesses, the Financial Services Authority (FSA) announced this morning.
Allied Irish Bank (UK), Bank of Ireland, Clydesdale and Yorkshire banks (part of the National Australia Group (Europe)), Co-operative Bank, Northern Bank and Santander UK said they would participate in the review of their sales of these products and the redress exercise, on the same basis as those larger banks which signed the agreement that was announced on 29 June.
Those banks, Barclays, HSBC, Lloyds and RBS, also agreed to compensate small-to-medium business customers that were mis-sold the most complex interest rate hedging products and to stop marketing interest rate structured collars to retail customers.
However, the banks announced today were not investigated for their sales of interest rate hedging products and so there has not made any finding of mis-selling.
The FSA said that in agreeing to join the review, the banks were ensuring customers that bought these products will be treated consistently, irrespective of who they bank with.
In addition, the FSA has agreed with the four larger banks the terms of reference for their independent reviewers. These include giving each customer the right to have an independent reviewer present during any meetings or calls with the bank. The FSA expected these banks to proceed rapidly with their reviews.
Clive Adamson, director of supervision in FSA's Conduct Business Unit, said:
“This is a major exercise but one that we hope will ensure even more businesses benefit from having their individual situation reviewed.
“I am pleased that Allied Irish Bank (UK), Bank of Ireland, Clydesdale and Yorkshire banks, Co-operative Bank, Northern Bank and Santander UK have agreed to join the larger banks in reviewing their past sales. Although the number of their sales was smaller and while there is no presumption that mis-selling has occurred, it shows their willingness to do the right thing and ensure their customers who bought these products can be confident that they will be treated on an equal basis."