Businesses 'lack trust' in banks

 
Canary Wharf The BCC said financial institutions needed to rebuild trust

Businesses' trust in banks and other financial institutions is falling, according to a survey from the British Chambers of Commerce (BCC).

Half of the 1,560 businesses questioned said they mistrust banks and building societies, while 38% said they trust them less than a year ago.

Banks and building societies remain the main source of finance for firms.

Meanwhile, a separate survey revealed businesses' hiring intentions fell to a 28-month low in September.

But the report from accountants BDO also said that business optimism showed a rebound this month, "continuing the zigzag pattern of ups and downs in confidence of the last four years".

'Repair relationships'

The BCC survey said 57% of firms felt confident they could secure external finance, while 37% said they were not confident of doing so.

Some 59% of those polled said a government-backed business bank would make them more confident about accessing finance.

But when asked about government-backed finance schemes, 43% of firms had not heard of any, with younger businesses and micro firms most likely to be unaware of them.

"Financial institutions need to rebuild trust and repair damaged relationships with businesses and improve transparency," said John Longworth, the BCC's director general.

"Regulators should look to increase competition in the banking sector to ensure businesses have more choice, and the government must ensure that plans to create a British Business Bank mean more funds available to growing businesses."

 

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  • rate this
    +2

    Comment number 198.

    Personally, I don't trust banks, energy companies, insurance companies or politicians. Something desperately needs to be done to address this and to make people accountable. THAT's what's needed.

  • rate this
    +1

    Comment number 172.

    Banks are great to businesses that are highly profitable and use lots of banking services.

    If anything turns sour they are callous, unhelpful and will do anything to drive you away.

  • rate this
    +3

    Comment number 167.

    Of course business's don't trust the banks, they are the very reason we are in this mess in the first place! Thousands of business's living up to their credit limits have crashed, all those years hard work for NOTHING! The government are to blame for everything, DO NOT expect anything less while we 'let' this go on, we have all been made irrelevant by our lack of action.

  • rate this
    +3

    Comment number 106.

    You don't have to run a business to have lost all trust in banks

  • rate this
    +1

    Comment number 104.

    As an SME owner, I can confidently say that lack of trust in banks is the main reason for low bank lending. Who would risk their homes in the hands of such institutions? Govt guarantee schemes are pointless since they only apply to loans for which banks have failed to obtain security. SMEs want more risk lending (i.e. no security) and are happy to pay a premium for it. Are you listening Vince?

 

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