Banks ‘too slow to pay back firms’

The City watchdog has revealed that some firms have been waiting more than six months for the outcome of their case.

The Financial Conduct Authority (FCA) said progress on compensation for so-called interest rate swaps had been slower than expected so far. Only 22 firms agreed redress deals last month, out of nearly 30,000 cases being reviewed.

So far 32 offers have been accepted, totalling £2m.

But the FCA said it expects the number of offers to increase “rapidly” over the next few months, with banks planning to send out more than 1,000 offers in October.

Martin Wheatley, chief executive of the FCA, said: “Whilst we are moving in the right direction, we expect to see the pace at which cases are resolved and redress paid quicken over the coming weeks.

“Many small business owners have been waiting too long to find out if they were mis-sold and we are now eager to see people repaid as soon as possible.”

The regulator has told banks it wants most customers who have opted into the review to be informed of the outcome of their case and, where applicable, receive initial offers of redress by the end of the year.

Interest rate swaps are complicated derivatives that might have been sold as protection – or to act as a hedge – against a rise in interest rates without business customers fully grasping the downside risks.