Mis-sold Swaps to cost UK banks billions

Over the past decade banks have been boosting their profits by selling Interest Rate Swap deal to SME businesses. The idea was that for a fee the business would be protected from interest rate increases on their bank loans. It is similar, but not the same as insurance. The flip side is that if the interest rate goes down the business has to pay the difference via the bank to the other party in the interest rate swap. 

Back in the 1990s there was a big fuss about IRS deal wrongly sold to Local Authorities. Much activity was focussed on unwinding the deals and paying compensation to the local authorities.  There is no way that the banks didn't know that IRS deals can be very bad news for SME organisations, but the banks gave in to greed again.

They fully deserve a big compensation bill.

NatWest Bank Branch problem

I've just had 25 minutes of my life stolen from me by the NatWest Bank.

I used to have my main accounts and savings with them, but those were removed to another bank long ago following poor service and dubious interest rate practices. My wife and I have a joint account with the NatWest ever since we married over 30 years ago, but I cannot access it because the bank lost its record of my date of birth. However that's another story.

My company currently banks with the NatWest, but needless to say that customer relationship is hanging by a thread. It is only the work required to notify our clients and suppliers which protects the NatWest. We no longer leave any substantial sums of money in that bank. It goes elsewhere to where we know our custom is valued.

I've taken a day out from my business and was tidying some paperwork in my home office when I came across a bunch of shares dividend and royalty cheques I'd overlooked. Mostly I use direct payment of dividend/royalties into my other bank, but there are a few I still handle manually via the NatWest. I duly totted up the total value of the cheques and filled in the paying-in book prior to visiting the local NatWest Bank branch. As I'm in London at the moment it just happened to be the Lewisham branch. When I arrived at 2:25pm I found a long queue snaking around inside the branch. I checked my watch suspecting a long wait would follow. Only two counter positions were open.

I was not disappointed. It took 25 minutes for me to reach the front of the queue. During the wait I'd seen fourteen people turn away from the branch when they saw the length of the queue. By that time an additional counter position had opened. The manager tried to make the claim that refurbishment works would be completed within a couple of weeks and the queuing would not happen. What total nonsense! The queue was there because there were not enough counter positions open. In fact their refurbishment work is reducing the physical number of counter positions.

Perhaps the NatWest bank regards 25 minutes as an acceptable waiting time for their customers? I most certainly don't. The rot started when the retail banks decided it was a clever idea to remove Branch Managers. You know the type, they'd recognise you in the street and would have an idea of how much money you owe/deposit in the bank. When things went wrong with their service you'd know who to complain to. Instead now the NatWest wastes its money on television advertising spouting propaganda that the NatWest is a caring bank or something similar.

The Banks just don't get it do they?

I've just seen a rant on a Blogsite where the author bewails that banks are not charities. It is typical view of a majority of investment bankers who think that they are owed a highly paid job where the remuneration is orders of magnitude greater than the average national wage. In fact most of their jobs are not that complex and there not really much more personal risk than someone working in an industrial firm. I've seen these people at work for over 30 years, so I know what they do.

The tax payers rescued the banking system. Without that rescue those highly paid bankers would be on the street. It certainly is good fodder for a storyline in my next book.

Alaric.